Virgin Wines UK plc (AIM: VINO), one of the UK’s largest direct-to-consumer online wine retailers, is pleased to announce its unaudited interim results for the six months ended 27 December 2024 (the “Period”).
Financial highlights
- Total revenue of £34.1 million1 (H1 2024: £34.3m)
- Strong profitability driven by operational efficiency, with PBT up 20% to £1.3m (H1 2024: £1.1m) while EBITDA remained in line at £1.6m
- Strong balance sheet, with no debt, £23.7m of gross cash and net cash2 of £17.3m, an increase of 57% year-on-year (H1 2024: £11.0m)
Strategic highlights
- Strong Christmas trading performance
- Revenue up 6.7% in the six weeks to 27 December 2024 to £13.5m with the December period up 9% year-on-year delivering record sales for a single month outside the covid affected period
- Active and loyal customer base, with a continued focus on high-quality customer acquisition
- Leveraging the underlying strengths of the operating model and a continued focus on strategic marketing and promotional activity to drive loyalty and growth
- New customer acquisition for the Group up 29% in the Period and by 25% during December 2024
- 12-month rolling cancellation rate of WineBank, the Group’s main subscription offering, at an all-time low of 14.9%
- Operational efficiencies reinforce position as the lowest cost to serve
- Cost per case reduced by 10.1% during the Period, and by 5.4% in December, despite the 10% increase in the National Living Wage and cost pressure on paper and energy affecting packaging and courier costs
- Warehouse Management System (WMS) continues to drive further efficiency benefits, with the Company’s award-winning Customer Service team rated ‘Excellent’ on Trustpilot
- New Warehouse Wines brand proposition delivered encouraging growth
- Warehouse Wines ended the Period with 17,600 customers and has generated £1 million of revenue in the half year to end Dec 2024
- The Company is encouraged with the progress made and has invested in its customer acquisition and marketing while leveraging the core operational infrastructure of the Group
- Continued high growth in the Commercial channel
- Year-on-year revenue up 17% during the Period, and 32% in December
- The Company is expanding its partnership with Moonpig3 following an agreement for Virgin Wines to manage the growth of their alcohol category
- Strategic partnership with Ocado launched in October delivering positive early results, with further partnership opportunities in the pipeline
Strategic Growth Plan and Capital Allocation Policy
- As stated separately this morning, Virgin Wines has announced a strategic growth plan focusing on four key areas: customer acquisition, commercial partnerships, Warehouse Wines and the development of a mobile app, projecting revenues to increase to £100 million over the duration of the plan. The announcement also sets out the Group’s capital allocation policy
Current trading and outlook
- Second half trading has started positively, and our product offering continues to resonate with our customer base
- The acceleration in new customer acquisitions seen in H1 2025, coupled with the resilience of trading, our position on being the lowest cost to serve direct-to-consumer online wine retailer and the strength of the Group’s balance sheet provides the Board with confidence to implement an ambitious 5-year Strategic Growth Plan.
- Post-period end, the Company was pleased to announce the appointment of Amanda Cherry to the Board as Chief Financial Officer in a planned transition as Graeme Weir enjoys a well-earned retirement. Amanda will work alongside Jay Wright and the executive team to deliver the next phase of growth
(1)Continued to increase market share and outperformed the online drinks market
(2)Net cash of £17.3m is total cash of £23.7m less Wine Bank customer deposits of £6.4m. The business remains debt free with customer deposits held in a separate ring-fenced account
(3)Both teams continue to work closely, with new developments expected to be announced in due course
Jay Wright, Chief Executive Officer at Virgin Wines, commented: “I am pleased to report a positive first-half performance, with the business delivering encouraging results, particularly during the peak Christmas trading season.
“Our strategy of acquiring high quality customers at an industry-leading low cost per recruit, while maximising the quality and value of our wines through our unique open-source buying model, continues to position us well to navigate market headwinds.
“We have introduced a number of new strategic initiatives to diversify our offering and enable us to appeal to as many potential customers as possible. Our Warehouse Wines value proposition continues to deliver positive results, while our Vineyard Collection range and the premium Australian Five O’clock Somewhere Wine Club showcase the unquestioned expertise of our Buying Team alongside our network of winemakers around the world.
“We continue to work with a large range of partners to deliver increased numbers of new customers whilst strengthening our relationship with key commercial partners such as Moonpig and Ocado.
“Today we also announced our Growth Plan and Capital Allocation Plan. This is an ambitious and transformational change in our business strategy and investment case, which we are excited to implement over the coming years.
“Virgin Wines has a unique and differentiated low-cost business model, a loyal and active customer base and a highly experienced team that has consistently delivered industry leading results. We are confident that the Company will execute the new Growth Plan announced today and deliver increased value for shareholders.”
