Virgin Wines hails resilient first half as it announces growth plan
Virgin Wines UK has reported an “resilient” first half performance following strong Christmas trading.
In the six months to 27 December, total revenue was broadly flat at £34.1 million while pre-tax profit climbed by 20% to £1.3 million, with EBITDA remaining in line at £1.6 million.
Meanwhile, the retailer saw its revenue increase by 6.7% to £13.5 million in the six weeks to 27 December and by 9% in December.
During the half year, Virgin Wines continued to focus on strategic marketing and promotional activity to drive loyalty and growth. This helped new customer acquisition to rise by 29% in the six months and by 25% during December.
Never Miss a Retail Update!The retailer continued to benefit from high growth in its commercial channel with December revenue up 32% year-on-year.
It is currently expanding its partnership with Moonpig following an agreement for Virgin Wines to manage the growth of the online greeting card retailer’s alcohol category. Virgin Wines also launched a partnership with Ocado in the period.
Jay Wright, chief executive officer at Virgin Wines, said: “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.”
Following the period end, Virgin Wines announced the appointment of Amanda Cherry to its board as chief financial officer.
Giving an update on more recent trading, the retailer said its second half had started well as it announced a new growth plan that focuses on customer acquisition, commercial partnerships, Warehouse Wines and the development of a mobile app. Virgin Wines said the plans had been developed to “turbocharge” growth as it targets £100 million annual revenue by 2030.
Wright said: “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.”
