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Majestic Wine to stockpile up to £8m of wine on post-Brexit shortage fears

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Photo: Reuters
Photo: Reuters

British retailer Majestic Wine (WINE.L) has announced plans to stockpile up to an additional £8m ($10.3m) of wine ahead of Brexit day, amid fears of a shortage of deliveries in case of a no-deal Brexit.

Several other UK firms have already expressed fears a no-deal Brexit could lead to gridlock at ports and disruption to the transport of supplies and ingredients. Caterer Compass and cake producer Premier Foods announced plans to stockpile earlier this week.

Majestic reported a half-year loss of £0.2m ($0.3m) for the six months to October from a £3.1m profit the previous year. It warned about “tough” retail conditions linked to the UK leaving the EU.

The retailer expects its expansion plans for its Naked Wines division to dent the unit’s profits. Overall, investments in the online retailer proved to be higher than expected at £20m or more over the full-year.

The company expects underlying earnings to “be flat at best” for the 2018-2019 tax year. Shares slumped by over 17%:

Chart: Yahoo Finance UK.
Chart: Yahoo Finance UK.

However, Majestic said it was still on track to meet its £0.5m sales target for the financial year.

“We set out a plan at our capital markets day in April 2018 and we are delivering against it. That plan was to accelerate growth by investing in new customers and, so far, the plan is on track”, said group chief executive Rowan Gormley.

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