Secondary Recommendation

Majestic Wine

December 2011

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Sales for H1 to end September were up 9% to £127.8m. Pretax profit and eps each grew by 20% to £8.8m and 9.8p, respectively. Margins grew by 60 basis points to 13.9% as Majestic exploited its buying strength in difficult markets.The success driver continues to be the UK estate where in the first half Majestic opened eight new UK stores, taking the total to 171. That helped UK retail sales lift by almost 10% to £117m (+2.7% like-for-like) with the business also continuing to see the benefits from the change to a minimum order of six bottles and the demise of various off licence operators as a result of the recession. Internet sales were also up 8.7% and now account for 9% of total UK sales. Majestic has seen like- ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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