Majestic Wine plans to stockpile ahead of Brexit

majestic

Majestic Wine (LON: WINE) has become the latest company to reveal plans to stockpile ahead of Brexit.

The specialist wines retailer has said that it plans to import an additional £5-8 million worth of stock in case of disruption to trade when the UK leaves the EU.

The group revealed a small loss in the first half of this year, blaming the “tough” trading conditions in 2018. 

Majestic Wine revealed a pre-tax loss of £200,000, compared to the £3.1 million in profits made the same period a year earlier.

Chief executive Rowan Gormley’s said in a statement: “The UK retail market is tough and will continue to be a drag on performance in Retail and Majestic Commercial; whereas we had previously targeted growth, we now expect FY2019 (full year 2019) adjusted EBIT (earnings before interest and tax) across these business units to be flat at best vs FY2018.”

“We were planning for tough times and we’re investing through tough times because we know that’s the route to a more profitable future.”

“As a result, we now have a business that is almost 45% online and over 20% international with both the option, and intention, to invest further in order to drive returns.”

Shares in the group tumbled 12% in early trading.

Liberum analyst Wayne Brown said: “The weak performance in Majestic Retail is a surprise and should have been better considering the summer.”

Other retailers to plan to stockpile measures ahead of Brexit include Cadbury owner Mondelez (NASDAQ: MDLZ) and Premier Foods (LON: PFD). Premier Foods expects to spend up to £10 million on the preparations.

“The group shortly intends to start a process of building stocks of raw materials to protect the company against the risk of delays at ports,” said the group that owns Bisto, Oxo and Mr Kipling.

Shares in the UK’s largest specialist wines retailer are currently trading down 14.02% at 322,00 (0955GMT).