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Research Tree provides access to ongoing research coverage, media content and regulatory news on MAJESTIC WINE PLC. We currently have 14 research reports from 3 professional analysts.
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MAJESTIC WINE PLC
MAJESTIC WINE PLC
Another encouraging peak trading period but a long way still to go
10 Jan 17
As per our channel checks over Xmas, WINE duly delivered strong peak trading. Group sales +15.3% with the standout being +7.5% LFLs at Majestic Retail which represents c.90% of group trading profits despite very tough comps of +7.3% LFLs but at a big cost to the gross margin (we think c.50-75bps) given the highly price promotional UK wine retailing market. Management states that WINE is on track to be in line with full year expectations. We therefore nevertheless expect that FY17 PBT consensus of £11.3m will move to the top end of the current range (£10.7m - £12.4m) where our forecasts are struck. We have been consistently sceptical about the enlarged Majestic Wines/Naked Wines on a variety of levels. We continue to think that the restoration of the legacy Majestic Retail business to sustained growth, vitality and competitiveness will be highly protracted. Meanwhile, we think that Naked Wines has yet to prove its ability to grow both sales and profits simultaneously on a sustainable basis such is the financial model in online wine retailing based on customer lifetime values and the consequent criticality of customer acquisition and retention. Maintain HOLD as we expect forecast momentum to remain flat over the next 6 months, whilst we still struggle to agree with management’s contention that the WINE transformation plan is working such that it will drive a fundamentally different competitive position and a lasting step-change in WINE’s operational and financial performance.
Panmure Morning Note 17-11-2016
17 Nov 16
H1FY17 results are in line with the significantly downgraded (-c.24%) consensus estimates following the September 21 profit warning. Adj PBT of £0.1m reflects in large part strategic investment costs highlighted at the H1FY16 results. One year into its 3 year transformation plan, management strikes a confident tone around its plan being on track to “deliver sustainable growth”, highlighting that WINE is at a profitability “tipping point” post the heavy P+L investment phase. The reinstatement of the interim divi at 1.5p, cash conversion of adj profits (albeit materially reduced y/y), and good progress in the five KPIs (most notably customer retention) are supportive of such confidence. We still think, however, that the restoration of the legacy Majestic retail business (still c.90% of the enlarged group’s trading EBIT) to sustained growth, vitality and competitiveness will be highly protracted. Meanwhile, we think that Naked Wines has yet to prove its ability to grow both sales and profits on a sustainable basis such is the financial model in online wine retailing based on customer lifetime values and the consequent criticality of customer acquisition and retention. We use this note to update our stale forecasts to reflect both the effects of the September 21 profit warning and today’s in line H1FY17 results. Maintain HOLD.
Panmure Research - Majestic Wine Flash 07-01-16
07 Jan 16
In the wake of the recent H1FY16 results, the strategic update and the subsequent significant rebasing of consensus forecasts, in addition to our follow-up conversations with management and today's encouraging Xmas (10 weeks) trading update, we publish our new forecasts (struck in line with consensus estimates which we think will remain unchanged today) and move to Hold from Under Review and reinstate our previous Target Price of 320p. As such, we take a more neutral stance on the stock than our previous negative stance. This reflects the balance of (1) our continued reservations about a sustainable restoration in the fortunes of the legacy Majestic business resulting from the 3 year turnaround plan, and (2) our recognition of the potential source of forecast outperformance on a 3 to 5 year basis is Naked Wines. In short, we can see the payoff arising from better capital allocation in the future as the enlarged group moves more towards Naked Wines' capital-light/high ROI growth model, which should be positive for valuation metrics like EV/Return on invested capital.
Panmure Research - Majestic Wine Flash 16-11-15
16 Nov 15
We place our Sell recommendation Under Review as the shares (viz. Nov 13's closing price of 310p) have now gone through our Target Price of 320p. The shares are down 26% since we reiterated our Sell in our Sept 14 note and 34% since mid-August when we highlighted that the shares had risen, bafflingly, to such highs post the Naked Wines acquisition in April whilst the UK retail sector's hitherto strong relative 12 month stock outperformance started to fade over the summer. We think it necessary to await our 1-on-1 meeting with the CFO later today to better understand the financial implications of today's results/strategic review, and our 1-on-1 meeting with the CEO/CFO on Friday Nov 20 to better digest the strategic review before revisiting our investment stance.
20 Feb 17
Hayward Tyler Group* (HAYT): Trading update and financial position (CORP) | Petra Diamonds (PDL): Interim results (BUY) | Gemfields* (GEM): Interim results (CORP) | Premaitha Health* (NIPT): Middle East momentum (CORP) | Sound Energy (SOU): Acquisition update and TE-8 well spud (HOLD) | Proactis* (PHD): Interim trading on track (CORP) | 7digital* (7DIG): Automotive contract win (CORP)
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
N+1 Singer - Morning Song 22-02-2017
22 Feb 17
CORETX (COR LN) Contract wins and new Lifestyle facility | Gooch & Housego (GHH LN) Solid Q1 trading plus earnings enhancing acquisition of StingRay Optics | NCC Group (NCC LN) Further issues in Assurance | PCI-PAL (PCIP LN) Strong H1 underpins positive outlook | UBM (UBM LN) Results | Verona Pharma (VRP LN) Phase IIa RPL554 add-on trial to tiotropium commenced
N+1 Singer - Carpetright - Recovery has just begun
17 Feb 17
With UK LFLs up 6.8% in Jan against tough comparatives, and Europe LFLs up 5.4% in Q3, the first clear evidence is now visible that the transformation strategy is gaining momentum. Given some uncertainties, market forecasts are yet to reflect this, but upgrades seem likely as further initiatives are rolled out. Despite a recent bounce from its all time low, the valuation is still very low on consensus assumptions, where risk now appears to be shifting to the upside. With scope for re-rating too, our 300p target price has the scope to grow to 500p over 18 months. We re-initiate with a Buy.
The Crown Joules
15 Feb 17
We believe that own-brand retailers that operate a balanced multi-channel proposition will be well placed to prosper in a competitive apparel market going forward. Joules is one company in particular which we believe will outperform the sector given its loyal and growing customer base, distinctive brand and strong track record of opening profitable space. We initiate coverage on the shares with a buy recommendation and price target of 249p, implying upside of 16.9% over the prevailing market price.
Panmure Morning Note 19-01-2017
19 Jan 17
Pets at Home have released a Q3 trading update this morning that will disappoint the market. Group like-for-like revenue growth was just +0.1% through 3Q16 as subdued trading across the Merchandise business weighed on continued strong growth in Veterinary Services. Profit outlook for FY17 remains in line with expectations. Suspect the shares will come under pressure.