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Majestic Wine (WINE) has reported sales growth of 13% in the six months ended 26 September, but its top-line growth was accompanied by a £4.4m loss after weak commercial performance and the failure of a US marketing campaign.

Overall revenues were up 13.2% on a headline basis to £205.6m and 10.6% on an underlying basis during the period.

Sales were boosted by 5.7% like-for-like growth in the Majestic Wine retail operations, driven by a 9.1% increase in customer numbers. The sales increase represents the chain’s sixth consecutive quarter of like-for-like growth.

Its Naked Wines online delivery business also saw strong growth, with sales up 26.7% to £59m, despite what Majestic called “a failed direct mail programme”.

However, commercial sales were up just 1.2%, a significant slowdown against historic performance.

In September Majestic said its full-year profits would be lower than expectations because its direct mail programme for Naked Wines in the US failed to generate sales and the weak commercial performance.

Therefore, adjusted EBIT dropped 92.4% to just £0.7m from £9.2m in the same period last year and it made a £4.4m loss before tax and making a £4.3m pre-tax profit in the first half of 2015.

However, Majestic insisted its transformation plan remains “on track”.

“The investments we have made are working, our lead indicators are improving and sales are growing,” the company stated. “The step change in fixed costs is complete, continued sales growth will translate to profit growth.”

Rowan Gormley, group chief executive, added: “Our plan is working. We said that we would deliver sustainable growth, not by opening more stores, but by investing in better customer service and better customer retention.

”Both of these are working – sales are up over 10% and the projects driving that sales growth, like nationwide next day delivery, are on time and on budget. Now that we have built a solid platform for future growth, future cost growth will be much lower.”

Majestic restated its commitment to delivering £500m in sales by 2019 and insisted this “will translate into healthy profit growth now that the step change in investment is complete”.

Majestic also reinstated its dividend payment to shareholders of 1.5p per share compared to no dividend being paid for the same period last year.

Majestic’s shares are up 2.7% to 310p so far this morning, but remain more than 25% down over the past three months after September’s profits warning.

Morning update

Newly combined Ahold Delhaize (AD) has reported “solid” third quarter results with continued sales momentum this morning.

Combined net sales increased by 64.2% to €13.9bn (up 64.6% at constant exchange rates), with pro-forma net sales growth of 2.6% (up 2.9% at constant exchange). Net income increased by 24.9% to €236m (up 25.3% at constant exchange rates) as price pressure from ongoing deflation in the US was offset by volume growth.

Dick Boer, CEO of Ahold Delhaize, said: “Despite challenging conditions in certain markets, Ahold Delhaize has delivered growth in sales and in underlying operating income on a pro forma basis which reflects the strength and resilience of our great local brands, as well as our continued focus on delivering cost efficiencies across our businesses while driving top-line growth.”

There’s not too much else of note on the market this market, but later this morning Wal-Mart and Asda will announce their third quarter results as the UK supermarket struggles to turn around a damaging slump in 2016 sales.

The FTSE 100 has recovered by 0.3% to 6,772.7pts so far this morning.

Early movers include Hotel Chocolate (HOTC), up 2.9% to 250p, Devro (DVO), up 2.5% to 176.3p and Glanbia (GLB), up 2.3% to €15.75.

Fallers include Total Produce (TOT) down 1.6% to 145.2p, CARR’s Group (CARR), down 1.2% to 147.2p and Real Good Food (RGD), down 1% to 40.1p.

Yesterday in the City

It was another downbeat day in the City yesterday as the Trump effect still seems to be weighing on UK shares as the FTSE dropped another 0.6%$ to 6,749.7pts.

Stock market jitters haven’t stopped two major pieces of grocery market M&A this week, with Cranswick (CWK) following Greencore’s (GNC) acquisition of Peacock Foods yesterday by snapping up the Northern Irish pork business of Dunbia.

Cranswick was 1.7% higher yesterday to 2,263p as investors welcomed the expansion.

The other major news was the London same-day grocery delivery tie-up between Morrisons (MRW) and Amazon. It was a tough day for the supermarkets generally and Morrisons slipped 1.5% on the news back to 218.5p.

However, the major loser was Ocado (OCD), which collapsed 8.5% to 258.2p as its own progress to sign international partners remains slow while Amazon threatens to eat its lunch in the UK.

Elsewhere, B&M European Value (BME) retail was up another 4.5% to 256p yesterday after its better than expected results on Tuesday. Hilton Food Group (HFG) was up 3.7% to 595p and Stock Spirits (STCK) was up 3.5% to 164.5p.

Booker Group (BOK) fell 1.6% to 172.8p, Tesco (TSCO) was down 1.8% to 213.2p and AG Barr (BAG) fell 2.3% to 488.1p.

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