REG - Virgin Wines UK PLC - Trading Update

Virgin Wines UKAnnouncement

29/01/2025 07:00

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RNS Number : 0270V  Virgin Wines UK PLC  29 January 2025

29 January 2025

 

 

Virgin Wines UK plc

("Virgin Wines", the "Company" or the "Group")

 

Trading Update

Strong Christmas trading, increased levels of customer acquisition, further
operational efficiencies and a healthy balance sheet signals positive momentum

Virgin Wines UK plc (AIM: VINO), one of the UK's largest direct-to-consumer
online wine retailers, is pleased to announce its Christmas trading update as
well as an update for the six months ended 27 December 2024 (the "Period").

Strong Christmas trading:

 ·             Revenue increased by 6.7% year-on year during the 6 weeks to 27 December 2024
 ·             Sales up 9% in December 2024 versus December 2023 to the highest level since
               the Covid-19 lockdowns

 

We are pleased to have delivered a highly encouraging performance over the key
Christmas trading period and generated positive momentum during the 6 weeks to
27 December 2024. This was underpinned by initiatives to grow the customer
base and optimise customer acquisition, as well as strategic marketing and
focused promotional activity. This resulted in a 25% year-on-year increase in
new recruits during December.

H1 overview:

 ·             Revenue broadly in line with the same period last year at £34.1 million (H1
               2024: £34.3m)
               o Significantly outperformed the online drinks market, which declined by
               5%, evidencing encouraging market share gains by the Company*
 ·             Q2 sales increased by 2.1% year-on-year, despite trading conditions continuing
               to be subdued following the General Election and Autumn Budget impacting
               consumer confidence and discretionary spend
 ·             PBT increased by 20% year-on-year during the Period to £1.3m (H1 2024:
               £1.1m)
 ·             Despite increased investment in customer acquisition and Warehouse Wines
               during the Period, EBITDA for the Period was unchanged from last year at
               £1.6m
 ·             The rolling 12-month WineBank cancellation rate fell to an all-time low of
               just 14.9% (Dec 2023 16.8%, Dec 2022 17.8%) showing the outstanding loyalty of
               WineBank members
 ·             Strong cash position of £23.7m in gross cash as at 27 December 2024 (H1 2024:
               £17.4m), with net cash of £17.3m (H1 2024: £11.0m) and customer WineBank
               deposits of £6.4m. The business remains debt free with customer deposits held
               in a separate ring-fenced account

 

The Commercial channel continued to deliver growth, with year-on-year revenue
increasing by 17% during the Period and by 32% in December, and the strategic
partnership with Ocado which launched in October has delivered positive early
results with exciting opportunities in the pipeline with our commercial
partners imminent.

We are also encouraged by the performance of the new Warehouse Wines value
proposition, which now has 17,600 customers and generated £1m of revenue
during the Period, something we expect to grow and will invest in further.

Further operational efficiencies were realised with the cost per case reduced
by 10.1% during the half year, and by 5.4% in December, despite considerable
cost pressures particularly relating to increases in the National Living Wage.

FY25 outlook

Having delivered an encouraging first half performance, the Board remains
confident that the FY25 outturn will be in line with current market
expectations and that the Company is well positioned to continue on its growth
trajectory and deliver shareholder value. There is also a clear market
opportunity to consolidate our position as one of the UK's largest and well
capitalised direct-to-consumer online wine retailers.  As a result of our
clear growth opportunity, the Company will announce its Growth Strategy and
new Capital Allocation Policy at the Interim Results in March.

Jay Wright, Chief Executive Officer at Virgin Wines, commented:

"We are pleased to report an encouraging first-half performance, and
particularly strong year-on-year growth of 6.7% over the key six-week
Christmas trading period despite the continued sector and macro-economic
headwinds. We delivered increased levels of new customers, improved our
operating cost per case and continued to drive high growth through our
Commercial channel. We continue to increase market share thanks to the loyalty
of our customers, our outstanding customer service and the quality of our
wines.

Our strong balance sheet and healthy cash position gives us the opportunity to
invest in growth and I look forward to sharing those exciting plans when we
come to announce our interim results in March. In the meantime, we are
confident of delivering a strong H2 performance."

* Source: IMRG Online Retail Sales Tracker December '24

 

- Ends -

Enquiries:

 

 Virgin Wines UK plc                                            Via Hudson Sandler

 Jay Wright, CEO

 Graeme Weir, CFO

 Cavendish (Nominated Adviser and Sole Broker)                  Tel: +44 (0) 20 7908 6000

 Matt Goode

 Carl Holmes

 Seamus Fricker

 Elysia Bough

 Hudson Sandler                                                 virginwines@hudsonsandler.com (mailto:virginwines@hudsonsandler.com)

 (Public Relations)                                             Tel: +44 20 7796 4133

 Alex Brennan

 Dan de Belder

 Harry Griffiths

 Eloise Fleet

 

Notes to editors:

 

About Virgin Wines

Virgin Wines is one of the UK's largest direct-to-consumer online wine
retailers. It is an award-winning business which has a reputation for
supplying and curating high quality products, excellent levels of customer
service and innovative ways of retailing.

 

The Company was established in 2000 by the Virgin Group and was subsequently
acquired by Direct Wines in 2005 before being bought out by the Virgin Wines
management team, led by CEO Jay Wright and CFO Graeme Weir, in 2013. It listed
on the London Stock Exchange's Alternative Investment Market (AIM) in 2021.

 

Virgin Wines is headquartered in Norwich, with two fully bonded, national
distribution centres in Preston and Bolton. It stocks over 650 wines sourced
from more than 40 trusted winemaking partners and suppliers around the world
which it sells to a large active customer base, the majority of whom are on
one of the Group's subscription schemes.

 

The Company drives the majority of its revenue though its fast-growing
WineBank service, that has over 137k members, using a variety of marketing
channels, as well as through its 30 strong Wine Advisor team, its Wine Plan
channel and its Pay As You Go service.

 

Along with its extensive range of award-winning products, Virgin Wines was
delighted that its flagship WineBank service was awarded 'Wine Club of the
Year' at the 2024 IWC Awards, was named Online Drinks Retailer of the Year for
2022 at the Drinks Retailing Awards, as well as receiving the bronze award for
Contact Centre of the Year at the 2022 UK National Contact Centre Awards. In
addition, in 2023 the Group's Head of Buying, Sophie Lord, was named Buyer of
the Year by Decanter magazine.

 

https://www.virginwinesplc.co.uk

 

 

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