Majestic Wine has grown first-half adjusted profit before tax to £6.8 million on the back of strong sales in its Naked Wines division.

Naked was profitable in the UK, the US and Australia and posted adjusted earnings before interest and tax of £4.7 million, compared with a loss of £2.8 million a year ago.

Majestic Retail also recorded profitable growth and the group said it is on course to reach £500 million in retail sales by 2019.

The total business broke even in the first half of the 2016-17 financial year, so chief executive Rowan Gormley was delighted with the turnaround in fortunes.

He said his team had worked “like demons” to achieve the £6.8 million pre-tax profit figures, and said the turnaround plan is starting to bear fruit.

“The plan is on track. Two years in and profits are growing, our foundation is solid and we are ready to accelerate growth,” chief executive Rowan Gormley said.

“We have the opportunities to invest in new customers and a team excited to focus on what they do best. It’s time to put our foot on the gas.

“In this half, Naked Wines has demonstrated the quality of its model, people and management, by achieving profitability in all three geographical markets.

“The focus on empowering our wonderful store teams in Majestic Retail has finally borne fruit, with improved staff engagement flowing through into improved customer engagement, which means improved loyalty and retention.

“It has become a disciplined business committed to continuous improvement.”

One surprise source of growth for Majestic has been the long-suffering sherry category, as it reported 25% sales growth on the Spanish fortified wine.

It also tipped port to have a strong 2018 as volume sales are currently up 18%, while Madeira is up 224% from a small base.

It has also grown Magnum sales by 378%, with rosé and house red driving that growth, and Majestic expects a “big” performance from them at Christmas.

It has turned to less heralded regions in the wake of exchange rate pressures and short harvests in classic regions and said sales of eastern European wines are up 279% and Portuguese volumes have grown 58%, while at Naked Wines sales of Hungarian wine are up 52%.