Majestic Wine has seen its profits dip by a 22.5% following its recent acquisition of smaller online rival Naked Wines, although the group said that investment in its future was key to its long term success.

Rowan Gormley, the chief executive of Naked Wines, who took over as chief executive of Majestic following the acquisition in April, said that the company has “many unique competitive advantages, especially its incredible staff”.
In the 52 weeks ended March 30th 2015, revenue was up 2.3%, but group profit before tax declined to £18.4 million from £23.8 million the previous year, reflecting costs related to the Naked Wines acquisition.

However, revenue was up 2.3% to £284.5 million and like-for-like sales in UK retail stores were up 1.9%, giving promise to the company’s long-term prospects.

Average price per bottle of still wine purchased increased t in the period to £8.00, with an increase of 12.4% in online sales, which now represent 12.1% of UK retail sales.

Commenting on the results Rowan Gormley, chief executive, said: “I have only been group chief executive for ten weeks but it is clear to me that the enlarged Majestic Group has excellent future prospects. Majestic Wine has many unique competitive advantages, especially its incredible staff. When combined with Naked Wine's digital strengths, and both businesses ability to source exclusive and exciting wines for their customers, we are uniquely placed to build a fast growing international leading wine specialist."

"Whilst my review of the business is ongoing it is obvious that we need to make investments to reinvigorate Majestic Wine. These investments will initially suppress profit in the short term but I am confident we can rebuild momentum in this excellent business. At the same time we aim to maintain the international growth trajectory of Naked Wine and crystallise the benefits of having the two businesses in the same group. I am confident that we will create significant value for our shareholders over the medium term."