Majestic Profit Down on Less French, Business Custom(update 1)

June 15 (Bloomberg) -- Majestic Wine Plc, owner of the U.K.’s largest chain of wine warehouses, said profit for the year fell 71 percent on declining sales at its Wine and Beer World stores in France and fewer sales to business customers.

Net income in the 12 months through March fell to 3.3 million pounds ($5.4 million) from 11.3 million pounds the previous year, the Watford, England-based company said in a statement distributed by the Regulatory News Service today. Revenue rose 2.4 percent to 201.8 million pounds.

Businesses in the U.K. have curtailed spending on wine and champagne for parties and gifts and the pound’s drop against the euro has discouraged British customers from crossing the English Channel to buy wine in France.

“From the middle of September, we saw a sharp decline in sales to business customers,” Chief Executive Officer Steve Lewis said in a telephone interview. Consumers demand has been little changed, he said.

Majestic took an impairment charge of 5.3 million pounds on its French business, the company said in the statement. The company closed its distribution depot in Calais and is returning some workers to the U.K., Lewis said.

“In the long run, I think business will come back” to the French unit, Lewis said, adding that low tax on wine in France compared with the U.K. and a strengthening pound will help the unit recover.

Majestic Wine fell 6.5 pence, or 3.5 percent, to 182 pence in London trading, valuing the company at 112 million pounds.