Investment Analysis Survey

 Investment Research Report Analysis Paper

Corporate and business Financial Administration

Investment Analysis Report


Majestic Wine beverage Plc


a)Majestic Wine may be the UK's biggest retailer specializing in sales of wine by the mixed case (About Majestic, 2011). The company was established in 80 (About Regal, 2011). They have 166 retailers in the UK and has exposed stores in France also (About Majestic, 2011). In addition, it has an online presence to generate sales.

The company's strategy is made around delivering a high regular of customer care by trained staff (Majestic annual statement 2011, 2011, p. 3). All selling staffs are required to take the Wine and Spirit Education Trust's advanced qualification after regarding six months in the company (Our Staff, 2011).

b)Majestic Wine is listed on the Alternative Investment Industry (AIM), Birmingham Stock Exchange's dedicated market for smaller and growing companies. This kind of allowed Majestic Wines to raise capital by simply issuing stocks to the community yet confront lower regulating pressures and expenses because would have recently been the case if it was on the main stock exchange (AIM, 2010, p. 5). It can be contended that Majestic's market capitalisation is sufficient for it to go to the main exchange however it will result in higher regulatory expenses which a growing company just like Majestic prefer to avoid to save capital for expansion.

c)The table below reveals company's economical performance over the last 5 years. Revenues elevated every year even though growth was higher in the last two years. The organization managed to develop sales in the past year ended 03 2009 because of acquisition of an italian wine firm.

The pre-tax revenue and net profits likewise increased every year except for the season ended 03 2009. The numerous decline in profits last season was due to poor economic environment and substantial write-down for the goodwill value of France business (Majestic annual survey 2009, 2009, p. 3). The pre-tax profit margins of around 8% and net profit margins of 5. five per cent indicate a stable and lucrative business.

Trends in earnings per share implemented those in profits. Returns have grown quicker than net profits over the years. Majestic possibly maintained the dividend last year in spite of significant reduction in net profit as a result of noncash characteristics of goodwill write-downs and management's perception that profits will increase in the short term.

d)Majestic is a extremely cash generative business. The net cash coming from operations was ВЈ17. two million back in ended March 2011 (Majestic annual statement 2011, 2011, p. 30). The large cash by operations was also significantly more than the cash used in investing. The business is able to self-generate money for expansion and hence simply no dilution in equity pertaining to funding growth. This is also noticeable from the higher percent increase in dividends (53%) than in net profits (36%) over the last five years.

Another strength with the business is usually its ability to maintain profit margins in spite of the present economic climate. The organization was able to maintain its prices, which show that customers worth the level and quality of its support.

The higher teaching of staff and individual attention to buyers imply that the corporation will confront issues in increasing income. The profitability can also be under pressure due to competition coming from superstores, which will limits the capacity of the business to increase rates.

(f)The company has built a strong network of retail stores in the UK (Majestic annual record 2011, 2011, p. 60). The company is usually confident of nearly duplicity the number of shops because of decrease in minimum order requirements by 12 to six bottles (Preliminary results, 2011). The company is additionally targeting business customers which represented 24% of their sales this year (Majestic total annual report 2011, 2011, g. 8). This is expected to pull in more volume of customers and it is reflected in estimated 10% or higher annualised increase in product sales in Mar 2012 and 2013 (Yahoo analyst estimations, 2011)....

Referrals: About Majestic, 2011. About Majestic. [Online] Majestic Wine plc. Offered from: [cited 6th March 2011]

AIM, 2010

Arnold, G., 2008. Corporate and business Financial Supervision. 4th edn, Pearson Education Limited.

Fernandez, P., and Campo, L., 2010. Industry Risk High grade used in 2010 by Professors: a survey with 1, 500 answers. Working conventional paper, 15 Might 2010.

FEET bonds, 2011. Bonds – Benchmark federal government. [Online] Financial Times. Offered from: [cited 25th March 2011]

FTSE 100 historical rates, 2011

Historic share price, 2011. Historic Prices. [Online] Yahoo! Financial. Available from: [cited twenty fifth October 2011]

Majestic annual report 2007, 3 years ago

Majestic twelve-monthly report 2009, 2009. Total annual Report & Accounts 2009. [Online] Majestic Wine plc. Available from: [cited 24th October 2011]

Regal annual report 2011, 2011

Our staff, 2011. Our Staff. [Online] Majestic Wine beverage. Available coming from: [cited twenty fourth October 2011]

Preliminary results, 2011

Voting legal rights, 2011. Voting rights and capital [Online] Majestic Wine beverage plc. Obtainable from: [cited 25th March 2011]

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