Virgin Wines impacted by internal and operational challenges
Virgin Wines has posted declining sales and profits in the first half of its financial year after the company was impacted by internal and operational challenges.
In the six months to 31 December 2022, total revenue fell to £33.6 million from £40.6 million a year earlier, while pre-tax profit came in at £0.1 million compared to a previous £3.2 million.
Jay Wright, chief executive at Virgin Wines, said: “As previously announced in our year-end trading update, profitability was impacted during the first half, with a number of macroeconomic headwinds exacerbating certain internal and operational challenges which we encountered particularly over our peak Christmas trading period.”
During the period, Virgin Wines acquired 60,000 new customers with the cost per recruit remaining low and better than expected.
The company also launched a new partnership with Saga which generated over 2,000 new members in the lead-up to Christmas. In addition, partnerships with Moonpig, Avanti West Coast, LNER, Great Weemstern Railway and Virgin Red were pivotal in driving revenue through its B2B channel.
Giving an update on more current trading, Virgin Wines said sales in January and February were broadly in line with expectations following consistent demand from loyal customers. As previously announced, the company is expecting its full year revenue to come in at around £63 million.
Wright said: “We continue to make progress on addressing the challenges where we can, and we remain confident in the future growth prospects of Virgin Wines.
“The growth in our WineBank membership and continued focus on low cost customer acquisition, disciplined cost control, maximising gross margins and optimising working capital to maximise free cash flow, places us in an advantageous position to capitalise on opportunities as the cost of living crisis eases.”
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