Majestic Wine (AIM:MJW) - is the wine retailer on the cusp of a growth spurt?
The AIM quoted wine retailer was a constituent of many inheritance tax planning portfolios several years ago, however, the much improved quality of AIM over the past few years combined with lacklustre returns from MJW has found it fall out of favour and the shares perform poorly over the past 12 months. With results out on Monday 17th November it might be time to have another look at this excellent niche retailer.
Trading at 13x current year estimates the shares don’t look particularly cheap, especially if you factor in the stagnant earnings of the parts few years. If anything it has simply been a ‘good’ if unspectacular business. The dividend payout has also remained consistent at 16p since 2012 equating to a yield of 4.3% at the current share price. Cash generation remains decent but free cash flow fairly ordinary However, we have seen a noticeable improvement in web offering and the shopping experience remains excellent. Recent investment in systems and processes could be starting to pay off and the forthcoming interims…