Companies: MJW   

It was always going to be nearly impossible for the wine retailer to beat last year's superb like-for-like sales, thanks to the gorgeous summer, but interim results to September remain full bodied.

Group sales lifted 8% to £74.6m and pre-tax and pre-amortisation profits were up 26.6% to £5m. UK like-for-like sales increased 7.4% (on top of 12% last year) but like-for-like sales at Majestic's French operations rose only 2.8% (21.7%), which was attributed to a lack of discounting by ferry operators. During the period, three sites were opened with a re-siting in Cambridge. This month will see a further three shops and a re-site, with two more opening by the year end. In total, Majestic runs 120 shops, 23 of which are freehold. Although the big supermarkets are applying pressure to the UK wine market – currently worth £4.2bn and growing by 6.2% per year – chief executive Tim How says Majestic is competing well, as its customers' average spend per bottle is £1.50 higher at £5.46 and its database of customers increased 8.7% to 337,000. As a sign of continued confidence, the company increased its interim dividend by a third to 1.5p. Sales in the six weeks to 30 September are up 10.4% but double-digit like-for-like growth is not expected for the full year. Consensus analysts expect pre-tax profits for 2005 to reach £12m. The prospective p/e of 19 is about average for the sector. Hold.