REG - Virgin Wines UK PLC - Annual Results
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RNS Number : 2902E Virgin Wines UK PLC 22 October 2025
22 October 2025
("Virgin Wines", the "Company" or the "Group")
Audited Annual Results
Encouraging progress against all growth drivers and profitability ahead of
expectations
Virgin Wines UK plc (AIM: VINO), one of the UK's largest direct-to-consumer
online wine retailers, announces its audited Annual Results for the year ended
28 June 2025 ("FY25" or the "Period").
Financial highlights
· Total revenue in-line with last year at £59 million (FY24: £59 million)
despite the broader online drinks market contracting during the Period
· Profitability ahead of expectations((1)) notwithstanding the investments in
our growth strategy
o Adjusted EBITDA to £2.3 million (FY24: £2.8 million)
o PBT decreased by £0.1m to £1.6m (FY24: 1.7m)
· Gross product margins remained resilient at 35.6% (FY24: 37.6%), despite
inflationary pressures and higher operating costs amidst a rise in alcohol
duty, glass and packaging prices as well as the introduction of a new
sustainability tax (EPR)
· The balance sheet remains strong, with net cash of £9.3m((2)) (FY24: £10.3
million), gross cash of £17.6m (FY24: £18.4m), whilst remaining debt free
o The year-end cash balance is stated after the repurchase of £2m of shares
and £1.6m of cash utilised to pre-pay duty, hence the business is cash
generative year-on-year
o This positions the Company well as it increases investments in organic
growth in line with its growth strategy
Results summary FY25 FY24
£'m £'m
Revenue 59.0 59.0
Gross profit 17.8 18.8
Gross profit % 30.1% 31.9%
EBITDA pre share based payments 2.3 2.8
Profit/before tax 1.6 1.7
Diluted earnings per share 2.3 2.4
Net assets 22.6 23.3
Cash and cash equivalents 17.6 18.4
Net cash and cash equivalents 9.3 10.3
((1)) Consensus forecasts for FY25 profitability were Underlying EBITDA of
£2.2m and Underlying PBT of £1.3m
((2)) Net cash refers to total cash less ring-fenced WineBank deposits
Strategic highlights
· During the year, Virgin Wines announced its medium-term growth strategy,
targeting £100m of annual revenue at a 7% EBITDA margin
· Disciplined approach to customer acquisition
o 28% increase in customers acquired year-on-year with only a 6% increase in
investment
o New customer conversion rates remained strong at well above 40% despite
higher volumes
o Cost per acquisition of £16.40 (FY24: £16.66)
o Payback of +4.5 times over five years ensures high lifetime value and
favourable returns
· Continued strong growth in Commercial partnerships
o Our growing Commercial partnerships channel delivered a revenue increase
of 24% year-on-year (FY24: 5% YOY revenue growth)
o New partnership with Ocado is performing strongly as well as the extension
of our partnership with Moonpig
o Travel partnerships extended with LNER, Avanti and GWR and new
opportunities with WH Smith travel locations
o Independent recognition at The Drinks Business Awards 2025
· Investing in Warehouse Wines
o Warehouse Wines, our new value proposition, delivered its first full year
of trading with £1.8m in revenue, a commendable achievement and representing
growth of 484% year-on-year
o The Company sees an exciting opportunity in Warehouse Wines to enable it
to target a broader range of potential customers while utilising its existing
infrastructure and systems
· Technology and operational excellence
o Warehouse Management System continues to deliver efficiency gains with a
3% reduction in pick-and-pack cost per case
o Customer service department delivered savings of 17% year-on-year driven
by greater accuracy and faster despatch
o Encouraging progress in the development of a mobile app, which remains
on track for release in H2 2026
o Currently undertaking an internal review to identify how technology and AI
can enhance systems and operations, supporting the ongoing focus on efficiency
and excellence.
Current trading and outlook
· Trading remains in line with market expectations so far in FY26, and we
continue to make progress across all pillars of the growth strategy. This
includes growth in Q1 2026 of:
o 29% increase in customer acquisition year-on-year
o Strong growth within the commercial channel in line with expectations
o Warehouse Wines trading strongly with a 134% rise in revenue growth
· Despite inflationary pressures, rising duties and new regulatory costs, the
Company's resilient model, loyal customers and exciting medium-term strategy
positions it well to deliver meaningful growth
· The Board are pleased with the progress made against the four key pillars of
the growth strategy and are confident this will deliver long-term sustainable
growth
Jay Wright, Chief Executive Officer, commented:
"FY25 was a milestone year for Virgin Wines, being both our 25(th) anniversary
but also the year in which we announced our medium-term growth strategy, a
step-change for the business as we significantly increase our investments in
organic growth opportunities. During the year, we delivered a resilient
performance, with revenue in-line with the prior year against a market that
contracted and with profits being ahead of expectations, despite a challenging
consumer backdrop and significant cost pressures.
We saw strong growth in customer acquisition driven by our team's commitment
to innovation and underpinned by our disciplined approach. The commercial
channel continues to deliver robust growth, supported by our expanded
partnerships with Moonpig, Ocado and key travel operators, while our new value
proposition, Warehouse Wines, has made a strong start in its first full year
of trading, acquiring customers who demand great quality at outstanding value.
The development of our mobile app remains on schedule, and we are excited to
launch this in H2 2026, while we continue to assess how we can utilise
technology to drive efficiencies and ensure we remain the lowest cost to serve
in the sector.
Looking ahead, having launched our new growth strategy, we remain confident we
are well-positioned to deliver against our medium-term targets. With a
resilient and loyal customer base, a growing range of appealing propositions,
and exciting initiatives such as the launch of our mobile app, we remain
confident in meeting market expectations for FY26.
- Ends -
Enquiries:
Virgin Wines UK plc Via Hudson Sandler
Jay Wright, CEO
Amanda Cherry, CFO
Cavendish
(Nominated Adviser and Sole Broker)
Matt Goode, Seamus Fricker, Elyssia Bough (Corporate Finance)
Matt Lewis (Corporate Broking)
Hudson Sandler
(Public Relations)
Dan de Belder
Harry Griffiths
Jackson Redley
Tel: +44 20 7220 0500
virginwines@hudsonsandler.com (mailto:virginwines@hudsonsandler.com)
Tel: +44 20 7796 4133
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 former 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 of
over 145k, the majority of whom are on one of the Group's subscription
schemes.
The Company drives the majority of its revenue through its WineBank
subscription scheme, using a variety of marketing channels, as well as through
its Wine Advisor team, Wine Plan channel and Pay As You Go service.
The Company also has a fast-growing Commercial division, as well as having
recently launched Warehouse Wines, its DTC value proposition in 2024.
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, as well as being voted by UK consumers as Online
Retailer of the Year for 2025 at the People's Choice Awards. In addition, in
2023 the Group's Buying Director, Sophie Lord, was named Buyer of the Year
by Decanter magazine.
https://www.virginwinesplc.co.uk/ (https://www.virginwinesplc.co.uk/)
Chairman's Statement
Overview
During the year, Virgin Wines made considerable strategic progress which will
position the Business better for the long-term. In March, we announced our
medium-term growth strategy, representing our intentions to deliver meaningful
growth.
From a trading perspective, the team delivered a robust performance amid a
challenging market backdrop and considerable pressure on the wine sector, with
duty increases and an ever-increasingly complex operating environment. This
was compounded by the higher National Insurance contributions and National
Living Wage, both of which are impacting businesses across all industries.
The impact of these headwinds reinforces the resilience of our performance,
with our position as the lowest cost to serve operator in the sector and our
open source buying model enabling us to maintain margins and maximise product
quality.
With an encouraging outturn for the year, I wish to thank the entire Virgin
Wines team for their continued hard work, positivity and innovative approach,
and to our partners and customers for their ongoing support.
Performance
During the year, we were pleased to deliver revenue in line with last year at
£59m against a subdued market backdrop and during a period where the broader
online wine, beer and spirits sector declined by almost 10%. This points to
considerable market share gains during the year.
Despite revenue being in line year-on-year, we were pleased to deliver a
bottom line performance ahead of market expectations, with adjusted EBITDA of
£2.3m and PBT of £1.6m, despite investments made in-line with our growth
strategy. This reflects the strength of our proposition, maintaining a
disciplined approach to customer acquisition and leveraging the benefits of
our multi-channel approach.
We acquired 28% more customers than the prior year at just a 6% increase in
related costs. This is a testament to the increase in efficiency of our
marketing investments and the underlying strength of the product, service and
overall brand. We also achieved excellent growth in our Commercial channel,
where sales increased 24% year-on-year, and Warehouse Wines, our value
proposition, yielding a commendable £1.8m of revenue in its first full year
of trading.
Growth strategy
As mentioned, in March 2025, we unveiled our medium-term growth strategy,
which now underpins our next chapter of growth. The underlying business is
performing well, particularly against a challenging market backdrop, but the
strategy will see us increase investments in our operations and strengthen our
organic growth.
Built on four key pillars, the strategy focuses on areas within the Business
where the team has excelled despite limited investments, such as driving
customer acquisition, growing our Commercial partnerships and accelerating
Warehouse Wines, which has produced an encouraging early performance.
As well as significantly scaling up our investments in these areas, we will
enhance our application of technology to enable us to engage more frequently
and effectively with existing customers whilst diversifying how we acquire new
customers and create incremental revenue streams. As an example of this, we
are making great progress in the development of a mobile app, due to be
launched in early 2026, and are investigating potential applications for AI to
streamline processes and increase efficiency.
The Board is confident that this is the right strategy to deliver the next
phase of growth and will provide value for all of Virgin Wines' stakeholders.
Within five years, we believe Virgin Wines will reach
£100m in annual revenue at an adjusted EBITDA margin of 7%.
Alongside this, we initiated a share buyback programme, where in FY25 we
purchased 7.3% of shares to return value to shareholders. While we also
continue to assess potential M&A opportunities and introducing a dividend
policy, at present the Board believes that the best use of our capital is
investing within our growth strategy.
Board changes
Graeme Weir stepped down as Chief Financial Officer after 22 years in the
role. He has been succeeded by Amanda Cherry, who has worked at Virgin Wines
for 16 years. On behalf of all our colleagues, Jay Wright and I would like to
thank
Graeme and recognise his significant contribution to the development of Virgin
Wines over his long tenure.
Outlook
In what is Virgin Wines' 25th anniversary, I am confident that the business
has the right proposition, strategy and capitalisation to deliver the growth
we are aspiring to.
Trading so far in FY26 has been in line with our expectations and we are well
positioned to achieve our growth targets set out earlier
this year.
JOHN RISMAN
Chairman
Chief Executive's Review
Introduction
It's been an exciting year for Virgin Wines, as we announced our medium term
growth strategy targeting £100m in annual revenue at a 7% adjusted EBITDA
margin. The whole team is highly motivated to execute this and deliver real
growth despite the continued challenges of a subdued consumer landscape,
rising costs, and an increasingly heavy tax burden.
It's also been a landmark year for the business, being the 25th Anniversary of
Virgin Wines.
We were pleased to deliver revenue in line with the prior year, which compares
to a sector decline of 9.7%1 during the 12-month period. This market share
gain highlights the robustness of our business model, the loyalty of our
customers, and the success of our new initiatives, as we continue to diversify
our revenue base.
We have seen the early signs of a return to growth in our customer base, with
our key WineBank membership up 1.5% over the year, and improved loyalty with
the annual cancellation rate at just 14.7%, an improvement from 16.1% in FY24.
WineBank membership stood at 128.3k customers at the end of FY25 and our
WineBank proposition delivered £34.5m of FY25 revenue.
We maintain our disciplined approach to customer acquisition, where the Group
saw a 28% increase in the number of customers acquired for just a 6% increase
in acquisition costs. Our teams are constantly thinking creatively about
innovative new ways of converting new customers, so it is a credit to them
that we can deliver such enviable acquisition rates.
Our Commercial channel, which specialises in supplying the B2B market, has
shown impressive growth, with a 24% increase in revenue to just under £9m for
the year, driven by the expansion of our Moonpig and Ocado relationships.
Meanwhile, our new value proposition, Warehouse Wines, delivered £1.8m of
revenue in its first full year of trading, a commendable achievement.
Warehouse Wines shows positive signs of becoming a material contributor to
revenue and profit in the medium to long term.
Our disciplined approach to managing costs while driving productivity is a
core thread through all areas of the Business. We pride ourselves on being the
lowest cost to serve in the sector and were delighted to deliver a further
reduction in our operational costs, which equated to just 11% of revenue in
FY25, a reduction from 11.8% in FY24. To put this into context, this was
achieved despite an increase in the National Living Wage, increased National
Insurance contributions, and further cost pressures on fuel and packaging.
Our balance sheet remains strong, with the Group remaining debt-free and with
a gross cash balance of £17.6m at the year-end (£9.3m excluding customer
WineBank deposits). The strength of our cash position has allowed us to
introduce a share buyback programme, as well as commence implementation of our
growth strategy and capital allocation plan to drive significant growth in our
business over the next five years.
The talent, dedication, and enthusiasm of our teams, whether they are based in
our Head Office in Norwich or our National Distribution Centres in Preston and
Bolton, have been remarkable. There are many challenges to overcome in our
industry, and the resilience our team has shown in tackling these head-on, and
finding ways to mitigate wherever possible, has highlighted the innovative
approach and 'can-do' attitude so important to high-performing teams in the
current environment. My thanks go to each and every one of them for their
continued support and commitment.
Financial overview
During the year, we delivered revenues of £59m, in-line with the previous
year. Adjusted EBITDA of £2.3m was 4.5% ahead of market expectations, and PBT
of £1.6m was 23.1% ahead of market expectations, albeit both slightly lower
than FY24 partially due to the previously announced increased investment in
our growth strategy towards the end of the financial year.
The significant cost pressures facing the industry remained over the course of
the year, most of which were driven by Government policy. A complete revamp of
the alcohol duty regime was introduced in February 2025, with wines being
subject to a rising scale of tax for every additional 0.1% of alcohol, rather
than the flat rate previously charged between 11.5% ABV and 14.5%. The result
is that the vast majority of wines now incur a higher level of alcohol duty,
with a wine at 14.5% ABV now subject to £3.21 a bottle, as opposed to £2.67,
an increase of 54p a bottle (prior to VAT also being incurred).
The industry has also been subjected to a new sustainability tax called
Extended Producer Responsibility (EPR), which equates to approximately 10p per
bottle, as well as a further increase in the National Living Wage and
increased National Insurance contributions. The subdued consumer environment
has made it difficult to pass on these inflationary cost pressures to
customers solely through price increases without a significant effect on
consumer response and average order frequency.
Wherever possible, we have mitigated these increased costs through operational
efficiencies, leveraging the benefits of our open-source buying model, and
through the management of alcohol levels in our wines. However, gross product
margin declined in the year from 37.6% in FY24 to 35.6% in FY25, partially due
to these additional costs and partially through the change in channel mix
where revenue through the Commercial channel and Warehouse Wines have
increased. Whilst this lowers % gross margin the lower marketing and
operational costs alongside the leverage in volumes delivers increased net
contribution.
Despite these cost pressures, and in keeping with our desire to be the lowest
cost to serve in the sector, we further reduced our operational costs to 11%
of revenue from 11.8% the previous year, despite the inflationary environment.
As noted above, we have a strong balance sheet with no debt, gross cash of
£17.6m, and net cash of £9.3m (excluding WineBank customer balances). This
cash position is stated after £2m of shares were repurchased over the year
and £1.6m of outstanding duty pre-payment was carried into FY26. This healthy
cash position allows us to invest in growth, as outlined in our update to the
market in March 2025.
Our open-source wine buying model
It has been a challenging period for anyone involved in wine over the past 24
months, with the introduction of a new, highly complicated, and punitive
alcohol duty regime. This added significant complexity and substantial
increases in the tax charged for the majority of wines sold. This was in
addition to the 20% increase in duty that wine was subjected to in August
2023.
It has been more important than ever, therefore, that Virgin Wines has been
able to leverage its unique open-source buying model to mitigate these
additional costs wherever possible. Our buyers have worked with their wide
network of winemaking partners to secure increased volumes from areas with the
most attractive quality/value ratios and reduce volumes from areas where it
was less beneficial. We have also collaborated closely with our winemakers to
lower alcohol levels wherever practical, as long as it does not compromise on
the quality or stylistic character of the wine and were delighted that the
average rating of our wines was maintained at a healthy 4.2 out of 5.
This has helped us to minimise price increases to customers, highly important
given the pressure on consumers' disposable income and the knock-on effect of
price rises on order frequency and customer response rates. Our low levels of
inventory also mean we can influence the composition of our wine portfolio
quickly, with an average of only 12-14 weeks of stock committed at any point.
Our buying team continues to be recognised for the exceptional work they do,
and after our Buying Director Sophie Lord was awarded 'Buyer of the Year' by
Decanter magazine in 2024, the whole Buying team were shortlisted for Best
Off-Trade Buying Team and Sustainable Wine Buying Team of the Year at this
year's Wine Buyers Awards.
Our approach
Evolving our consumer propositions continues to be a key element in our
ability to attract and retain customers. We do not believe all customers want,
or need, the same experience and, as such, we continue to provide several
different ways customers can get the most out of Virgin Wines. We believe this
flexibility was a key factor in Virgin Wines being voted Online Retailer of
the Year at the 2025 People's Choice Awards alongside being rated 'Excellent'
on Trustpilot with a score of 4.6 out of 5 from over 25k reviews.
Our flagship subscription scheme, WineBank, continued to deliver outstanding
value to wine enthusiasts across the UK by allowing them to spread the cost of
buying wine, giving 20% 'interest' on their monthly deposits that can then be
spent on our wines, while also giving all WineBank customers free express
delivery. It was particularly pleasing to see the 12-month rolling
cancellation rate improve from an already excellent 16.1% to just 14.7%,
highlighting the outstanding levels of loyalty from customers using this
service. The number of customers with a WineBank membership also increased by
1.5% to over 128k.
Our Discovery Wine Club continues to offer customers the ease and convenience
of having an expertly curated case of wine delivered to their door every
quarter. Building on the success of this model, and to offer customers more
choice we've recently introduced a monthly four- bottle option. While this was
only launched recently, we believe having less wine, more frequently, will be
an attractive proposition, and we look forward to rolling this option out over
the coming year.
In addition, we still offer customers the ability to buy whatever they want,
whenever they want, from our full range, without any regular payment mechanic
or subscription. We are soon to enhance this proposition with the option of a
further mechanic that will offer those customers even greater value, and we
look forward to launching that prior to Christmas this year.
Our Wine Advisors continue to provide over 30k of our customers a personal,
one-to-one service, ensuring every wine purchased is perfectly suited to their
customers' tastes and that their personal client base receives the 'inside
track' on new wines and special discoveries that they may have otherwise
missed. They also handle any rare service queries that may occur, ensuring the
Wine Advisor handles the customer's entire relationship with Virgin Wines.
The team was streamlined at the end of our previous financial year, and they
have excelled over the past 12 months delivering an increase in revenue per
Wine Advisor of 27%, an outstanding achievement.
Growth strategy
During the year, we announced our new growth strategy to turbocharge the
business. Virgin Wines is entering an exciting phase of growth and
transformation. Our ambition is clear: to grow the business to circa
£100m in revenue at an adjusted EBITDA margin of 7% over the next five years.
We are starting from a position of strength, debt-free, with a robust balance
sheet and total cash of £17.6m at year end, giving us the firepower to invest
in strategic initiatives that will drive growth.
Our strategy is focused on four key levers:
1. Increased investment in customer acquisition, ensuring we reach more consumers
and strengthen our brand presence.
2. Expanding our Commercial channel, capturing opportunities in a market that
continues to evolve and grow whilst maximising the potential of our strong
existing relationships.
3. Driving momentum through our new value proposition, Warehouse Wines, which
allows us to capture a different demographic of wine- lovers and bring fresh
excitement to our portfolio.
4. Embracing technology, including the launch of a state-of-the- art mobile app
in H2 2026, designed to enhance the customer experience, increase engagement,
and open up additional avenues for growth, as well as utilising AI to further
improve efficiency.
We are confident that our diversified business model combined with this
strategy focused on targeted investments in innovation and our core business,
positions us to deliver sustainable long-term returns. We are confident that,
while ambitious, this is also a prudent strategy, ensuring that we create
value for shareholders while building a business that is resilient, flexible,
and future-ready.
Our strategy reflects a belief in the power of innovation, putting the
customer first, and upholding operational excellence to drive growth. We are
excited by Virgin Wines' potential and motivated by the impact these
initiatives will have on our business and for our stakeholders. As we embark
on this journey, we remain steadfast in our commitment to long-term value
creation, confident that the steps we are taking today will define our success
tomorrow.
Driving growth through our four strategic pillars will become a key focus for
Virgin Wines over the coming years, and we will report our progress against
these. Looking at each of these in turn:
1. New customer acquisition
In line with our new growth strategy, we have started to increase our
investments in customer acquisition, designed to deliver significant revenue
and profit growth over the next five years. It was therefore encouraging to
see a 28% increase in customers acquired year-on-year. Importantly, this has
been achieved while maintaining our disciplined approach to customer
acquisition costs, with just a 6% increase in investment leading to this 28%
rise.
We use a variety of channels to attract new customers, including partnerships,
strategic accounts, digital, social, and CRM activity. This mix of channels,
and the ability to target high-quality customers, ensures we can keep our new
customer conversion rates high, at well above 40%, despite driving additional
volume. So far, this increase in acquisition hasn't had any detrimental effect
on our cancellation rates.
We continue to deliver excellent levels of payback, at +4.5 times over five
years, ensuring an attractive return on investment and high lifetime value.
This disciplined combination of delivering a low cost per acquisition, high
customer conversion rates, and high levels of payback gives us the confidence
to invest more aggressively to drive the growth required in our core business.
2. Commercial
Our Commercial channel continues to go from strength to strength, with revenue
increasing by 24% year-on-year in FY25, with acceleration of growth in H2
2025. As one of our key growth areas, we will continue to drive this channel
and the performance over the past year shows why we have this confidence.
We are pleased to be growing our relationship with Moonpig to support them in
increasing sales through the alcohol category. As a key partner, we are
working together to deliver incremental value for both businesses through an
increased range and expanded portfolio of products.
We were also delighted to secure an ongoing relationship with Ocado to feature
a range of our wines on their website, with both parties being encouraged by
the performance so far. In addition, the partnership was acknowledged
independently at The Drinks Business Awards 2025, with Ocado and Virgin Wines
being awarded the runner-up place in the 'Best Launch' category.
We also continue to strengthen our presence in the travel sector, through our
ongoing relationships with a number of key train operators including LNER,
Avanti, and Great Western Railway. We have also recently expanded our
relationship with WHSmith as it prioritises travel locations, with consumers
able to enjoy a selection of our wines from its railway station and airport
sites.
Most importantly, we have a strong pipeline of new opportunities to help drive
sales through the channel over the next year, as well as further growth with
existing partners, and we are excited about the scale we can deliver over the
coming years.
3. Warehouse Wines
FY25 saw the first full year of trading for our new value proposition,
Warehouse Wines, and we have been encouraged by the progress made. There is a
vast amount of wine purchased by UK consumers in the £6.99-£8.99 per bottle
bracket, much of which is purchased through supermarkets. Given our ability to
source and blend wines that deliver exceptional value for money, as well as
our operational efficiency and existing infrastructure, we believe we can be
highly competitive on price whilst delivering superior quality wine directly
to a customer's door.
We have acquired over 21,500 new customers since launch, sold over 31,000
cases in the year, and delivered revenue just under £1.8m.
There are numerous partnerships that have already been established, and we
have an exclusive portfolio of just under 100 wines, rated in line with the
Virgin Wines portfolio. Warehouse Wines is rated as 'Excellent' on Trustpilot
from over 700 reviews, and we are confident that its strapline, 'Drink Better,
Spend Less,' is resonating with many current and prospective customers.
4. Mobile app development
We remain on track to deliver our highly anticipated mobile app in H2 2026.
This will increase engagement with existing customers, allow the Business to
communicate through push notifications, reducing the reliance on email
marketing, as well as opening up new opportunities to acquire an increased
number of new customers.
Operational excellence
Virgin Wines has always prided itself on operational efficiency and being the
lowest cost to serve in the sector. This constant focus on productivity,
accuracy, and excellence continued throughout FY25, resulting in a further
year-on-year improvement in the cost per case despite numerous inflationary
cost pressures, including rises in the National Living Wage, increased
National Insurance contributions, escalating paper costs, and higher
transportation costs. As announced in our growth strategy, we are currently
conducting a process internally to review how technology and AI can enhance
our systems and how we operate, as we continuously strive to deliver
efficiencies and excellence.
We continue to enjoy the benefits of our upgraded Warehouse Management System,
implemented in late 2022, to drive efficiencies in our pick-and-pack
operation, with the cost per case reduced by 3% year-on-year. The customer
service department saw even greater benefits, with higher levels of accuracy
in the fulfilment centre and faster despatch, allowing us to deliver a 17%
saving against FY24.
The full operational cost per case for FY25 was 11% of revenue, compared with
11.8% the previous year, with no negative effect on operational excellence.
Our Trustpilot score achieved 4.6 out of 5 and is also rated as "Excellent",
with our customers providing over 1,500 new 5-star reviews over the course of
the year.
Progress on sustainability
Sustainability is incredibly important for us as a business, and we regularly
review how we can enhance our operations and proposition to the benefit of all
of our stakeholders. The Board is fully committed to embedding environmental,
social, and governance principles at the heart of our strategy, recognising
that responsible business is not just the right thing to do, it is essential
for sustainable growth and resilience.
We are actively working to reduce our environmental footprint, cultivate
inclusive and thriving workplaces, and strengthen the positive impact we have
on the communities we serve. At the same time, we maintain rigorous governance
standards to ensure transparency, accountability, and ethical leadership
across all levels of the organisation.
The Board takes an active role in overseeing ESG initiatives, setting
ambitious goals, and reviewing progress to ensure that our commitments
translate into tangible outcomes. We understand that meaningful sustainability
is a journey, and we are determined to innovate and adapt in ways that create
enduring value for our shareholders, employees, customers, and society at
large.
During the year, we stepped away from offsetting and carbon neutrality to
concentrate on investing in implementing real change throughout our value
chain. Our carbon footprint is independently audited under ISO 14064-1 and we
will continue to disclose this, but we are redistributing the resources we
were putting into offsetting into insetting and reducing our emissions.
We will continue to focus on working to meet our SME SBTi target to reduce
Scope 1 and Scope 2 greenhouse gas (GHG) emissions by 42% by 2030 (from a 2021
base year) and to lower Scope 3 emissions.
Our culture, values, and people
This year, we have been celebrating Virgin Wines' 25th anniversary, and the
incredible journey we have been on during these two-and-a- half decades. When
we reflect, what stands out most is not just the milestones we've achieved as
a business, but the people who have made them possible. We're proud to have
built a culture that's energetic, inclusive, and innovative.
The long service of so many of our colleagues is proof that this is a place
where people want to stay, develop, and thrive. Listening to our people is key
to keeping this culture alive. We regularly conduct employee engagement
surveys to provide us with insights and inform how we develop the business.
We've also launched our Community Purpose Programme, empowering our people to
support causes that matter to them.
Given the market we operate within, we also understand the importance of
responsible drinking and the dangers of alcohol abuse. As such, we actively
promote the importance of enjoying alcohol in moderation to our employees and
customers and continue to drive our unique messaging that 'Drinking's only fun
when you don't overdo it.'
Our culture is vibrant because we celebrate achievements, encourage growth,
and support each other every step of the way. As we look to the future, we
remain committed to providing an environment where every individual can thrive
personally, professionally, and as part of the shared success of Virgin Wines.
Capital allocation plan
As highlighted throughout our communications, the strength of our balance
sheet has positioned the Board to strategically consider the optimal
deployment of our cash reserves. In line with the Boards vision, we have
unveiled a five-year growth plan aimed at scaling the Business to £100
million in revenue.
Additionally, we have implemented a share buyback program, with £2m spent on
repurchasing shares in the year, and we retain the flexibility to undertake
further buybacks as appropriate.
We continue to monitor potential M&A opportunities to support our growth
objectives and while the primary focus remains on investing cash into
expanding our business, the Board continues to periodically review the
potential for introducing a dividend policy.
Outlook
We enter the new financial year in a position of strength, with an exciting
growth strategy to execute.
Current trading remains in line with market expectations. We are pleased with
the progress to date across the key pillars of our growth strategy. Through Q1
2026, customer acquisition to the Virgin Wines brand has increased by 29%
year-on-year, revenue through our Commercial channel is tracking in line with
its annual growth target, and our value proposition, Warehouse Wines, has
grown 134% year-on- year. The development of our mobile app is on schedule and
remains on track for launch in H1 2026, representing an important step in
enhancing our customer experience and digital capabilities.
We continue to operate in a challenging consumer environment. Driving overall
business growth remains demanding against a backdrop of heightened cost
pressures, including unprecedented increases in alcohol duty, the introduction
of Extended Producer Responsibility (EPR) obligations, and rising salary and
input costs. These factors, alongside broader inflationary pressures,
underscore the resilience required to deliver sustainable growth in today's
market.
Despite these headwinds, we are encouraged by the progress we have made. The
performance of our growth initiatives demonstrates the strength and relevance
of our strategy, our existing customers remain more loyal than ever, and we
remain confident in our ability to navigate the current environment while
creating long-term value for our shareholders. We will continue to invest
strategically, innovate in our offerings, and build on the foundations that
underpin our business, ensuring we are well-positioned to capture future
opportunities.
JAY WRIGHT
Chief Executive Officer
Financial Review
Financial summary
We entered FY25 in a strong financial position following a successful FY24
that focused on streamlining our cost structure and improving our cash
balances through profit generation and reduction in inventory levels.
Cost structure
We continued to drive cost efficiencies in FY25, which were essential in the
face of continued inflationary pressure across the supply chain, increased
National Living Wage and significant increases in taxation and compliance
costs following the duty change in February 2025 and Extended Producer
Responsibility (EPR) launch in April 2025. Our continued focus on driving down
the cost to serve resulted in fulfilment costs in FY25 reducing to 11.0% of
revenue from 11.8% in FY24.
Cash and working capital
As a cash generative business with no borrowing, we were well placed to launch
our growth strategy in FY25 alongside a share buyback that saw £2.0m of
shares repurchased during the year.
We were able to use cash reserves to protect margin when duty increased in
February 2025, paying £5.7m of duty early, providing a cost saving of £0.6m.
Gross cash at year end was £17.6m, compared to £18.4m in FY24. Excluding
ringfenced WineBank customer deposits the end of year cash was £9.3m compared
to £10.3m at the prior year end. The cash balance is after spending £2.0m on
the repurchase of shares and is net of outstanding duty prepayment of £1.6m,
showing the strong cash generating ability of the business.
We seek to maintain optimal inventory levels to manage supply chain issues and
support our growth plans. Underlying inventory (excluding duty prepaid before
the rate increase) remained well controlled at £5.6m, down from £5.9m last
year.
Growth plan
We launched the growth plan in H2 FY25 with four key growth pillars. While
some initiatives will take time to bear fruit others are already delivering
growth.
Commercial - YOY commercial revenue increased 24.2% in FY25 to £8.9m through
a strengthening of existing partnerships and expansion of the commercial
customer base.
Warehouse Wines - Our value proposition achieved £1.8m sales in its first
full year of trading.
Recruitment - During FY25 we increased recruitment investment 6% driving a 28%
increase in recruits. Customer loyalty strengthened further in FY25, as core
customer retention increased to 83% from 81% last year. We also reduced the
proportion of active customers lapsing to 33.2% down from 35.7% demonstrating
our ability to translate customer recruitment into ongoing, sustainable
growth.
Mobile app - In order to improve customer experience and provide new ways to
recruit and engage with customers, in FY25 we began the development of a
mobile app, which is on target for launch in H2 FY26.
Outlook
Post year-end trading is in line with market expectations. While consumer
confidence remains a headwind across the sector, we are confident in our
ability to deliver sustainable growth through our focused strategy and
operational strengths.
Profit before tax
Profit before tax for the year was £1.6m compared to £1.7m in the prior
year. The Group does not propose any dividend for FY25 (FY24: nil).
Adjusted EBITDA
Adjusted EBITDA for FY25 was £2.3m, down from £2.8m in FY24. The decrease
primarily reflects the additional investment in recruitment alongside
inflationary pressures across the supply chain and higher taxation and
compliance costs. Adjusted EBITDA is not a statutory reporting measure but is
included as an additional performance measure consistent with previous
reporting.
Revenue
Revenue for FY25 was like-for-like with prior year at £59.0m (FY24: £59.0m).
Commercial revenue increased 24.2% to £8.9m (FY24: £7.2m). Core D2C sales
retention for the year remained strong at 88% (FY24: 93%).
Gross Margin
Gross margin in FY25 of 30.1% compared to 31.9% in FY24. The margin was
affected by cost pressures including the launch of EPR and increases in duty
in FY25. Proactive measures, such as using cash reserves to prepay duty,
helped to offset part of this impact. At the same time, our growth strategy
involved increased investment in customer acquisition, which alongside the
higher levels of revenue through our Commercial and Warehouse Wine channels
affected the overall margin mix.
Operating expenses
Operating expenses fell by £0.8m in FY25 to £16.8m, (FY24: £17.6).
Continued emphasis on driving efficiencies in order fulfilment helped to
offset inflationary pressures on goods, services, and employee costs.
Finance income and expense
Finance income for the period increased to £0.7m from £0.6m, despite reduced
interest rates in FY25, reflecting improved cash balances. Finance expenses
were £0.1m (FY24: £0.2m). Further details are available in notes 10 and 11
of the Financial Statements.
Amortisation and depreciation
The Business continues to invest in IT development where there is a clear
business case to enhance operational performance or strengthen our consumer
proposition. Amortisation and depreciation for the year remained unchanged at
£1.3m.
Impairment review
At the reporting date the Directors tested goodwill for impairment in
accordance with the requirements of IAS 36 Impairment of Assets. The total
carrying amount of the Group's single cash-generating unit was compared to its
estimated value in use. No impairment was identified. For further details see
note 14.
Taxation
The tax charge for the current financial period was £0.3m (FY24: £0.3m). The
tax charge relates to the charge on profit for the period in addition to the
movement in the deferred tax provision, measured using the tax rate of 25%
(FY24: 25%).
Earnings Per Share (EPS)
FY25 basic EPS 2.4p compared to 2.5p in FY24. The weighted average number of
shares in issue for FY25 was 55.0m (FY24: 55.9m). Diluted earnings per share
for FY25 was 2.3p, FY24 2.4p with the weighted average number of shares FY25
57.6m (FY24: 58.3m), (see note 13 of the Financial Statements for more
details).
Capital allocation
The priority of the Group is to utilise cash to grow through strategic
investment in both Capex and Opex, which underpins the growth strategy
announced during FY25.
During FY25, the Group continued its share buyback program, investing
£2.0m to repurchase shares, which are held in treasury to hedge against
future LTIP liabilities and potential shareholder dilution.
While the Group actively reviews potential M&A opportunities and other
avenues to enhance shareholder value, the primary emphasis remains on driving
organic growth.
At this time, the Group does not propose a dividend but will continue to keep
its dividend policy under review, ensuring alignment with strategic priorities
and shareholder interests.
Consolidated Statement of Comprehensive Income
for the 52-week period ended 27 June 2025
27 June 28 June
2025 2024
Note £'000 £'000
Revenue 5 59,021 59,005
Cost of sales (41,240) (40,200)
Gross profit 17,781 18,805
Administrative expenses (5,940) (6,261)
Selling and distribution costs (10,845) (11,311)
Operating profit 6 996 1,233
Finance income 10 725 602
Finance costs 11 (129) (154)
Profit before taxation 1,592 1,681
Taxation expense 12 (290) (302)
Profit for the financial period and total comprehensive income 1,302 1,379
Basic earnings per share (pence) 13 2.4 2.5
Diluted earnings per share (pence) 13 2.3 2.4
The results for the periods shown above are derived entirely from continuing
activities.
The Group has no other comprehensive income or expense other than the profit
above and therefore no separate statement of other comprehensive income has
been presented.
Consolidated Statement of Financial Position
as at 27 June 2025
27 June 28 June
2025 2024
Company number 13169238 Note £'000 £'000
ASSETS
Non-current assets
Intangible assets 14 11,357 11,159
Property, plant and equipment 15 110 202
Right of use assets 16 1,877 2,370
Deferred tax asset 17 - 194
Total non-current assets 13,344 13,925
Current assets
Inventories 18 7,153 5,868
Trade and other receivables 19 3,041 2,684
Cash and cash equivalents 20 17,579 18,370
Total current assets 27,773 26,922
Total assets 41,117 40,847
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables 21 (15,874) (14,425)
Derivative financial instruments 23 (6) (3)
Lease liability 16 (554) (539)
Total current liabilities (16,434) (14,967)
Non-current liabilities
Provisions 22 (413) (367)
Lease liability 16 (1,639) (2,193)
Deferred tax liability 17 (11) -
Total non-current liabilities (2,063) (2,560)
Total liabilities (18,497) (17,527)
Net assets 22,620 23,320
Equity
Share capital 24 560 560
Share premium 11,989 11,989
Own share reserve (43) (3)
Merger reserve 65 65
Share based payment reserve 294 552
Retained earnings 9,755 10,157
Total equity 22,620 23,320
The Financial Statements on pages 63 to 90 were approved by the Board of
Directors and authorised for issue on 21 October 2025. They were signed on its
behalf by:
AMANDA CHERRY
Chief Financial Officer
The notes on pages 67 to 90 form part of these Financial Statements.
Consolidated Statement of Changes in Equity
for the 52-week period ended 27 June 2025
Share capital Share premium Own share reserve Merger reserve Share based Retained earnings Total Shareholders'
£'000 £'000 £'000 £'000 payment reserve £'000 funds
£'000 £'000
1 July 2023 558 11,989 - 65 402 8,808 21,822
Profit for the financial period - - - - - 1,379 1,379
Total comprehensive income for the period - - - - - 1,379 1,379
Share-based payments (note 9) - - - - 266 - 266
Shares issued on exercise of share based payment 2 - - - (116) 116 2
Own shares distributed - - (3) - - (146) (149)
Total transactions with owners recognised in equity 2 - (3) - 150 (30) 119
28 June 2024 560 11,989 (3) 65 552 10,157 23,320
29 June 2024 560 11,989 (3) 65 552 10,157 23,320
Profit for the financial period - - - - - 1,302 1,302
Total comprehensive income for the period - - - - - 1,302 1,302
Share-based payments (note 9) - - - - (35) - (35)
Shares issued on exercise of share-based payment (note 24) - - 1 - (223) 223 1
Shares repurchased, held in treasury - - (41) - - (1,927) (1,968)
Total transactions with owners recognised in equity - - (40) - (258) (1,704) (2,002)
27 June 2025 560 11,989 (43) 65 294 9,755 22,620
The notes on pages 67 to 90 form part of these Financial Statements.
Consolidated Statement of Cash Flows
for the 52-week period ended 27 June 2025
27 June 28 June
2025 2024
Note £'000 £'000
Cash flows from operating activities
Profit before taxation 1,592 1,681
Adjustments for:
Depreciation and amortisation 6 1,298 1,311
Loss on disposal of intangible asset 14 - 23
Share-based payment (credit)/expense 9 (35) 266
Net finance costs 10, 11 (596) (448)
Increase in trade and other receivables (356) (70)
(Increase)/Decrease in inventories (1,285) 2,499
Increase in trade and other payables 1,412 257
Net cash generated from operating activities 2,030 5,519
Cash flows from investing activities
Interest received 10 725 602
Purchase of intangible and tangible fixed assets 14, 15 (911) (443)
Net cash (used in)/ generated from investing activities (186) 159
Cash flows from financing activities
Payment of lease liabilities 16 (539) (521)
Payment of lease interest 11, 16 (129) (154)
Issue of treasury shares 24 1 2
Purchase of own shares (1,968) (149)
Net cash used in financing activities (2,635) (822)
Net (decrease)/increase in cash and cash equivalents (791) 4,856
Cash and cash equivalents at beginning of period 18,370 13,514
Cash and cash equivalents at end of period 17,579 18,370
Cash and cash equivalents comprise:
17,579 18,370
Cash at bank and in hand
The notes on pages 67 to 90 form part of these Financial Statements.
Notes Forming Part of the Financial Statements
for the 52-week period ended 27 June 2025
1. General information
The principal activity of the Group is import and distribution of wine.
The Company was incorporated on 1 February 2021 in the United Kingdom and is a
public company limited by shares registered in England and Wales. The
registered office is 37-41 Roman Way Industrial Estate, Longridge Road,
Ribbleton, Preston, Lancashire, United Kingdom, PR2 5BD. The registered
company number is 13169238.
2. Accounting policies
This note provides a list of the significant accounting policies adopted in
the preparation of these consolidated financial statements to the extent that
they have not already been disclosed in the other notes above. These policies
have been consistently applied to all the years presented, unless otherwise
stated. The financial statements are for the Group consisting of Virgin Wines
UK plc and its subsidiaries.
Basis of preparation
The Group's financial statements have been prepared in accordance with
UK-adopted International Accounting Standards and with the requirements of the
Companies Act 2006 as applicable to companies reporting under these standards.
The accounting policies set out below have, unless otherwise stated, been
applied consistently to all periods presented in these Group financial
statements.
The financial information set out in this announcement does not constitute the
Group's financial statements for the period ended 27 June 2025 as defined by
Section 434 of the Companies Act. This financial information should be read in
conjunction with the financial statements of the Group for the period ended 28
June 2024 (the "Prior year financial statements"), which are available from
the Registrar of Companies. The Prior year financial statements were prepared
in accordance with UK adopted international accounting standards and the
applicable legal requirements of the Companies Act 2006. The auditors, Azets
Audit Services, reported on those accounts and their report was unqualified,
did not contain an emphasis of matter paragraph and did not contain any
statement under Section 498 (2) or (3) of the Companies Act 2006.
Accounting reference date
UK company law permits a company to draw up financial statements to a date
seven days either side of its accounting reference date. For operational
reasons the Company has adopted an accounting period of 52 weeks, and as a
result of this, the exact year-end was 27 June 2025 (2024: 28 June 2024).
Historical cost convention
The financial statements have been prepared on a historical cost basis except
for certain financial assets and liabilities (including derivative
instruments), measured at fair value through the income statement.
New and revised IFRS Accounting Standards in issue but not yet effective
At the date of authorisation of these financial statements, the Group has not
applied the following new and revised IFRSs that have been issued but are not
yet effective.
Effective Date IFRS Subject
1 January 2025 Amendments to IAS 21 Lack of Exchangeability
Amendments to IFRS 9 and 7 Classification and Measurement of Financial
1 January 2026 Annual Improvements to IFRS Accounting Standards - Volume 11 Instruments
Presentation and Disclosure in Financial
IFRS 18 Statements Subsidiaries without Public Accountability: Disclosures
1 January 2027 IFRS 19
Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture
Effective date deferred indefinitely Amendments to IFRS 10 and IAS 28
The Directors do not expect that the adoption of the Standards listed above
will have a material impact on the financial statements of the Group in future
periods.
Going concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position, are set out in the Strategic
Report and the Directors' Report, which also describe the financial position
of the Group. The Group's financial risk management objectives and its
exposure to credit risk and liquidity risk are set out in note 23.
During the period the Group met its day-to-day working capital requirements
through cash generated from operating activities. The Group's forecasts and
projections, taking account of a severe but plausible change in trading
performance, show that the Group should be able to operate using cash
generated from operations, and that no additional borrowing facilities will be
required.
Having assessed the principal risks, the Directors considered it appropriate
to adopt the going concern basis of accounting in preparing its consolidated
financial statements.
Climate change
The Group recognises the risks of climate change. The Group's current climate
change strategy focuses on reducing its carbon footprint through
sustainability initiatives to reduce waste and greenhouse gas emissions. The
impact of climate change has been considered in the preparation of these
financial statements, including the risks identified as part of the Principle
Risks and Uncertainties disclosures on page 31. None of these risks had a
material effect on the consolidated financial statements of the Group. In
particular, the Directors have considered the impact of climate change in
respect of the following areas:
· Going concern and viability of the Group over the next three
years;
· Carrying value and useful economic lives of property, plant and
equipment; and
· The discounted cash flows included in the value in use
calculation used in the annual goodwill impairment testing.
Whilst there is currently no material impact expected from climate change, the
Group is aware of the ever-changing risks related to climate change and will
continue to develop its assessment of the impact on the financial statements.
Basis of consolidation
The financial statements consolidate the financial information of the Group
and companies controlled by the Group (its subsidiaries) at each reporting
date.
Control is achieved where the Company has the power to govern the financial
and operating policies of an investee entity, has the rights to variable
returns from its involvement with the investee and has the ability to use its
power to affect its returns. The results of subsidiaries acquired or sold are
included in the financial information from the effective date of acquisition
or up to the effective date of disposal, as appropriate. Where necessary,
adjustments are made to the results of acquired subsidiaries to bring their
accounting policies into line with those used by the Group.
All intra-Group transactions, balances, income and expenses are eliminated on
consolidation.
The financial statements of all Group companies are adjusted, where necessary,
to ensure the use of consistent accounting policies.
Revenue recognition
Revenue from contracts with customers contains one performance obligation,
unless it is a WineBank sale, in which case there are two performance
obligations and this is described separately below. The single performance
obligation is the supply of goods. The transaction price is fully allocated to
the single performance obligation for non-WineBank sales. The Group recognises
revenue at a point in time when the single performance obligation is
satisfied. The performance obligation is satisfied when control is passed to
the customer. Control is deemed to pass to the customer upon delivery of the
goods.
Revenue is recognised at the transaction price of the sale of goods, net of
discounts and excluding value added tax, in the ordinary course of business.
The Group uses its accumulated historical experience to estimate the level of
returns on a portfolio level using the expected value method. Credit terms are
only provided to corporate customers, and the average days are 60.
WineBank
Amounts deposited by customers for WineBank are initially reported as a
liability in the Statement of Financial Position. On registering as a WineBank
customer, subscription customers agree to lodge a regular monthly sum into
their WineBank account. These sums accumulate in the customer account and
build a balance to use against their next purchase from the Group.
Amounts deposited by WineBank customers are reported within the Group cash
balance but are held separate to Group funds. WineBank deposits are not used
to fund the working capital of the business. WineBank customers can cancel
their WineBank account at any time and may request to receive their money back
immediately with no penalty whatsoever.
Using funds deposited through the WineBank scheme entitles account holders to
benefit from an extra discount on the Group's website prices. This discount
represents a 'material right' under IFRS 15 Revenue from Contracts with
Customers when customers spend their WineBank cash balance but not the
associated interest. The material right performance obligation is calculated
on a portfolio basis taking into account inactive customers and expected
future cash receipts which reduce the portfolio value of the material right.
The material right provision is included within contract liabilities and
deferred until the customer uses the discount on a future order.
Orders placed through the WineBank scheme also contain the same performance
obligation as for other sales, as described above. The transaction price
allocated to this performance obligation is the remaining amount after
allocating the element to the material right, and is recognised upon delivery
to the customer.
Finance costs
Finance costs on financial liabilities are recognised in the profit and loss
account over the term of such instruments at a constant rate on the carrying
amount. Issue costs relating to financial instruments are recognised in the
income statement over the term of the debt at a constant rate over the
instrument's life.
Interest on leases is calculated based on the interest rate implicit in the
lease. If that rate cannot be readily determined, which is generally the case
for leases in the Group, the lessee's incremental borrowing rate is used (see
lease accounting policy).
Taxation
Tax on the profit or loss for the year comprises current and deferred tax.
Tax is recognised in the Consolidated Statement of Comprehensive Income except
to the extent that it relates to items recognised directly in equity, in which
case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year,
using tax rates and laws enacted or substantively enacted at the reporting
date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. The following temporary differences are not
provided for: the initial recognition of goodwill, the initial recognition of
assets or liabilities that affect neither accounting nor taxable profit other
than in a business combination, and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in the
foreseeable future.
The amount of deferred tax provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and liabilities,
using tax rates and laws enacted or substantively enacted at the reporting
date. A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against which the asset
can be utilised.
The carrying amounts of deferred tax assets are reviewed at each reporting
date.
Foreign currencies
Functional and presentational currency
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the functional currency). The functional currency of the
Group is Pounds Sterling. The financial statements have been rounded to
thousands.
Transactions and balances
Transactions denominated in foreign currencies are translated into the
functional currency at the exchange rates prevailing on the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies
are translated at quoted rates of exchange ruling at the balance sheet date.
Exchange profits and losses arising from current trading are included in
operating profit.
Goodwill
Goodwill arising on the acquisition of subsidiary undertakings and businesses,
representing any excess of the fair value of the consideration given over the
fair value of the identifiable assets and liabilities acquired is capitalised.
The goodwill in the consolidated financial statements represents the goodwill
recognised in the predecessor holding company financial statements at the
original carrying value.
Goodwill is not amortised but is reviewed for impairment at least annually.
For the purpose of impairment testing, goodwill is allocated to each of the
Group's cash-generating units (or groups of cash-generating units) expected to
benefit from the synergies of the combination. Cash-generating units to which
goodwill has been allocated are tested for impairment annually, or more
frequently when there is an indication that the unit may be impaired. If the
recoverable amount of the cash-generating unit is less than the carrying
amount of the unit, the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit and then to the other
assets of the unit pro rata on the basis of the carrying amount of each asset
in the unit. An impairment loss recognised for goodwill is not reversed in a
subsequent period.
Intangible assets
Computer software is stated at cost less accumulated amortisation and
impairment losses. Software is amortised over its estimated useful life, of
between five and eight years, on a straight line basis.
Where factors, such as technological advancement or changes in market prices,
indicate that residual value or useful life have changed, the residual value,
useful life or amortisation rate are amended prospectively to reflect the new
circumstances.
Property, plant and equipment
Property, plant and equipment are stated at historic purchase cost less
accumulated depreciation and impairment losses. Cost includes the original
purchase price of the asset and the costs attributable to bringing the asset
to its working condition for its intended use.
Depreciation is calculated so as to write off the cost of an asset, less its
estimated residual value, over the useful economic life of that asset as
follows:
· Leasehold property - over the life of the lease
· Fixtures and fittings - 33.33% per annum
· Computer hardware and warehouse equipment - 33.33% per annum
Assets classified as 'work in progress' are not depreciated as such assets are
not currently available for (or in) use. Once in use, assets will be re-
categorised and depreciated at the rate appropriate to their classification.
The gain or loss arising on the disposal or retirement of an asset is
determined as the difference between the net sale proceeds and the carrying
amount of the asset and is recognised in the Statement of Comprehensive
Income.
Impairment of non-financial assets (excluding goodwill)
At each reporting date, the Group reviews the carrying amounts of its tangible
and intangible assets to determine whether there is any indication that those
assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated to determine the extent of the
impairment loss (if any). Where the asset does not generate cash flows that
are independent from other assets, the Group estimates the recoverable amount
of the cash-generating unit to which the asset belongs.
The recoverable amount is the higher of fair value less costs to sell and
value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific
to the asset for which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised immediately in comprehensive income.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (or cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognised for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised immediately in profit or loss to
the extent that it eliminates the impairment loss which has been recognised
for the asset in prior years.
Leases
A contract, or a portion of a contract, is accounted as a lease when it
conveys the right to use an asset for a period of time in exchange for
consideration. Leases are those contracts that satisfy the following criteria:
· There is an identified asset;
· The Group obtains substantially all the economic benefits from
use of the asset; and
· The Group has the right to direct use of the asset.
The Group considers whether the supplier has substantive substitution rights.
If the supplier does have those rights, the contract is not identified as
giving rise to a lease. In determining whether the Group obtains substantially
all the economic benefits from use of the asset, the Group considers only the
economic benefits that arise from use of the asset. In determining whether the
Group has the right to direct use of the asset, the Group considers whether it
directs how and for what purpose the asset is used throughout the period of
use. If the contract or portion of a contract does not satisfy these criteria,
the Group applies other applicable IFRS rather than IFRS 16.
The group leases various offices, warehouses and equipment. Rental contracts
are typically made for fixed periods of 5 to 10 years, but may have extension
options.
Contracts may contain both lease and non-lease components. The group allocates
the consideration in the contract to the lease and non-lease components based
on their relative stand-alone prices.
Lease terms are negotiated on an individual basis and contain a wide range of
different terms and conditions. The lease agreements do not impose any
covenants other than the security interests in the leased assets that are held
by the lessor. Leased assets may not be used as security for borrowing
purposes.
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present value of the
following lease payments:
· fixed payments (including in-substance fixed payments), less any lease
incentives receivable;
· variable lease payments that are based on an index or a rate, initially
measured using the index or rate as at the commencement date;
· amounts expected to be payable by the Group under residual value guarantees;
· the exercise price of a purchase option if the Group is reasonably certain to
exercise that option; and
· payments of penalties for terminating the lease, if the lease term reflects
the Group exercising that option.
Lease payments to be made under reasonably certain extension options are also
included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the
lease. If that rate cannot be readily determined, which is generally the case
for leases in the Group, the lessee's incremental borrowing rate is used,
being the rate that the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right-of-use asset
in a similar economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group:
· where possible, uses recent third-party financing received by the individual
lessee as a starting point, adjusted to reflect changes in financing
conditions since third party financing was received;
· uses a build-up approach that starts with a risk-free interest rate adjusted
for credit risk for leases held by Virgin Wines UK plc, which does not have
recent third-party financing; and
· makes adjustments specific to the lease, for example term and security.
If a readily observable amortising loan rate is available to the individual
lessee (through recent financing or market data) which has a similar payment
profile to the lease, then the group entities use that rate as a starting
point to determine the incremental borrowing rate.
The group is exposed to potential future increases in variable lease payments
based on an index or rate, which are not included in the lease liability until
they take effect. When adjustments to lease payments based on an index or rate
take effect, the lease liability is reassessed and adjusted against the
right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance
cost is charged to profit or loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability
for each period.
The Group has elected not to recognise right of use assets and lease
liabilities for leases of low-value assets and short-term leases. The Group
recognises the lease payments associated with these leases as an expense on a
straight-line basis over the lease term.
Inventory
Inventories are valued at the lower of cost and net realisable value on a FIFO
basis. Cost comprises purchase price plus associated freight and duty costs
for imported goods. Inventories are regularly assessed for evidence of
impairment. Where such evidence is identified, a provision is recognised to
reduce the value of inventories to its selling price after incurring any
future costs to sell.
Cash and cash equivalents
Cash and cash equivalents include cash on hand and with banks, as well as any
deposits made with financial institutions with a maturity period of less than
three months from the date of deposit. Cash and cash equivalents also includes
amounts received from WineBank customers which are not restricted and as such
are presented as cash and cash equivalents.
Financial instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Group
becomes a party to the contractual provisions of the financial instrument and
are measured initially at fair value adjusted by transactions costs, except
for those carried at fair value through profit or loss which are measured
initially at fair value. Subsequent measurement of financial assets and
financial liabilities are described below.
Financial assets are derecognised when the contractual rights to the cash
flows from the financial asset expire, or when the financial asset and all
substantial risks and rewards are transferred. A financial liability is
derecognised when it is extinguished, discharged, cancelled or expires.
Classification and subsequent measurement of financial assets
For the purpose of subsequent measurement, financial assets are classified
into the following categories upon initial recognition:
· financial assets at amortised cost; and
· financial assets/liabilities held at fair value through profit or
loss (FVTPL).
Financial assets at amortised cost
Financial assets at amortised cost are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active market.
After initial recognition, these are measured at amortised cost using the
effective interest method, less provision for impairment. Discounting is
omitted where the effect of discounting is immaterial. The Group's cash and
cash equivalents, trade and most other receivables fall into this category of
financial instruments.
The Group recognises a loss allowance for expected credit losses (ECL) on
financial assets that are measured at amortised cost. The amount of expected
credit losses is updated at each reporting date to reflect changes in credit
risk since initial recognition of the respective financial instrument.
The Group always recognises lifetime ECL on trade receivables. The expected
credit losses on these financial assets are estimated using a provision matrix
based on the Group's historical credit loss experience, adjusted for factors
that are specific to the debtors, general economic conditions and an
assessment of both the current as well as the forecast direction of conditions
at the reporting date, including time value of money where appropriate.
All income and expenses relating to financial assets that are recognised in
the Consolidated Statement of Comprehensive Income are presented within
finance costs or finance income, except for impairment of trade receivables
which is presented within other administrative expenses.
Classification and subsequent measurement of financial liabilities
The Group's financial liabilities include trade and other payables and
accruals, loans and borrowings and derivative financial instruments.
Financial liabilities are measured at amortised cost using the effective
interest method, except for financial liabilities held for trading or
designated at FVTPL, that are carried at fair value with gains or losses
recognised in the Consolidated Statement of Comprehensive Income.
All interest-related charges and, if applicable, changes in an instrument's
fair value that are reported in the Consolidated Statement of Comprehensive
Income are included within finance costs or finance income.
Derivative financial liabilities
Derivatives are initially recognised at fair value at the date a derivative is
entered into and are subsequently remeasured to their fair value at each
reporting date. A derivative with a positive fair value is recognised as a
financial asset whereas a derivative with a negative fair value is recognised
as a financial liability. The resulting gain or loss is recognised in the
Consolidated Statement of Comprehensive Income immediately. A derivative is
presented as a non-current asset or non-current liability if the Group has an
unconditional right to defer payment beyond 12 months. Otherwise derivatives
are presented as current assets or liabilities.
Employee benefits
The Group provides a range of benefits to employees, including annual bonus
arrangements, paid holiday arrangements and defined contribution pension
plans.
(i) Short term benefits
Short term benefits, including holiday pay and other similar non-monetary
benefits, are recognised as an expense in the period in which the service is
received.
(ii) Defined contribution pension plans
The Group operates a number of defined contribution plans for its employees. A
defined contribution plan is a pension plan under which the Group pays fixed
contributions into a separate entity. Once the contributions have been paid
the Group has no further payment obligations. The
contributions are recognised as an expense when they are due. Amounts not paid
are shown in accruals in the balance sheet. The assets of the plan are held
separately from the Group in independently administered funds.
(iii) Share-based payments
A transaction is accounted for as a share-based payment where the Group
receives services from employees, Directors or third parties and pays for
these in shares or similar equity instruments.
The Group makes equity-settled share-based payments to certain employees and
Directors. Equity-settled share-based schemes are measured at fair value
(excluding the effect of non-market-based vesting conditions) at the date of
grant, measured by use of an appropriate valuation model. The expected life
used in the model has been adjusted, based on management's best estimate, for
the effects of non-transferability, exercise restrictions and behavioural
considerations.
The fair value determined at the grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the period services are
received, based on the Group's estimate of shares that will eventually vest.
Share options are forfeited when an employee ceases to be employed by the
Group unless determined to be a 'Good Leaver'. A 'Good Leaver' is a
participant who ceases employment by reason of death, retirement, injury,
ill-health or disability.
The Group has discretion to recover the employer's National Insurance
liability from the employee. For the current active schemes the Company has
chosen to do so.
Merger reserve
The merger reserve was created as a result of the share for share exchange
under which Virgin Wines UK plc became the parent undertaking prior to the
IPO. Under merger accounting principles, the assets and liabilities of the
subsidiaries were consolidated at book value in the Group Financial Statements
and the consolidated reserves of the Group were adjusted to reflect the
statutory share capital, share premium and other reserves of the Company as if
it had always existed, with the difference presented as the merger reserve.
Retained earnings
Retained earnings includes all current and prior period retained profits and
losses. All transactions with owners of the parent are recorded separately
within equity.
Dividends are recognised when approved by the Group's shareholders or, in the
case of interim dividends, when the dividend has been paid.
Section 479c Companies Act 2006 audit exemption
The subsidiaries Virgin Wine Online Limited (registered number 03800762) and
Virgin Wines Holding Company Limited (registered number 07970057) are exempt
from the requirements of the Act relating to the audit of accounts under
section 479a of the Companies Act 2006.
3. Judgements in applying accounting policies and key sources of
estimation uncertainty
In preparing these Financial Statements, the Directors have made the following
key judgements and estimates:
Goodwill impairment assessment (note 14)
At each reporting date, the Group tests goodwill for impairment in accordance
with the requirements of IAS 36. The recoverable amount of the Group's single
cash-generating unit (CGU) is determined by calculating its value in use. The
value in use calculation requires the Group to estimate the future cash flows
expected to arise from the single CGU and to use a suitable discount rate in
order to calculate their present value. The value in use is then compared to
the total of the relevant assets and liabilities of the CGU. See note 14 for
details of the test for impairment and the relevant key assumptions.
Assessment of carrying values of plc company investments and amounts due from
Group undertakings
In relation to the plc company's investments in subsidiaries, the Directors
are required to assess whether there are any indicators of impairment at each
reporting date. All relevant potential indicators are considered, including
the performance of the underlying trading subsidiary and the results of the
Group's impairment assessment performed as at the same date as described
above. The Directors exercise their judgement in determining whether any such
indicators exist. Where an indicator of impairment is identified in relation
to the Company's investments or intercompany receivable balances, a full
impairment review is performed. The Directors performed their assessment and
concluded that no impairment indicators existed at 27 June 2025 and, as such,
a full impairment review over the company's investments in subsidiaries and
intercompany receivables was not performed.
In relation to the amounts due from Group undertakings, the Directors are
required to assess their carrying amount for any impairment using the expected
credit losses (ECL) model. As set out in note 6 to the Company Financial
Statements, the amounts owed by Group undertakings are unsecured, interest
free and repayable on demand. Consistent with the ECL model, the Directors
have assessed the carrying amount for impairment on the assumption that
repayment of the amounts were demanded at the reporting date. The Directors,
having determined that the borrower had insufficient highly liquid resources
at the reporting date, considered the expected manner of recovery and recovery
period of these loans (the Company's 'recovery scenarios'). The Directors
determined that the only non-trivial recovery scenario would be realised by
way of a dividend distribution by the Group's trading subsidiary, Virgin Wine
Online Limited. The Directors, amongst other factors, considered the ability
and intent of the subsidiary to make such a distribution if required, and
ultimately determined that any reduction in the carrying amount of these
receivables would be inconsequential to the Company's Financial Statements. On
that basis, no ECL provision has been recognised.
Sources of estimation uncertainty
The Group has considered other estimates and assumptions that, whilst not
deemed to represent a significant risk of material adjustment, do represent
important estimates at 27 June 2025 and are disclosed accordingly. The
valuation of the material right provision is disclosed as an other estimate in
the current year.
4. Segmental reporting
IFRS 8 requires operating segments to be determined based on the Group's
internal reporting to the Chief Operating Decision Maker (CODM). The CODM has
been determined to be the Board as it is primarily responsible for the
allocation of resources to segments and the assessment of performance of the
segments.
The level of aggregation of results reported to and assessed by the CODM
supports that there are not operating segments smaller than the business as a
whole, there is only one operating segment, which comprises all of the
operations of the Group. Performance of this operating segment is assessed on
revenue and Adjusted EBITDA (being operating profit excluding share based
payments and any exceptional items, see table on page 29). These are the
financial performance measures that are reported to the CODM, along with other
operational performance measures, and are considered to be useful measures of
the underlying trading performance of the segment. Adjusted items are not
allocated to the operating segment as this reflects how they are reported to
the Board.
5. Revenue
The Directors have considered the requirement of IFRS 15 with regards to
disaggregation of revenue and do not consider this to be required as the Group
has only one operating segment which is the sale of alcohol.
There is one geographical market being the UK, all revenue streams having
similar recognition policies and whilst the Group provides services,
Management do not believe such analysis would provide meaningful information
for users of the financial statements.
There were no major customers that individually accounted for more than 10% of
total revenues (2024: no customers).
6. Operating profit
Operating profit is stated after charging/(crediting):
27 June 28 June
2025 2024
£'000 £'000
Inventory charged to cost of sales 38,137 37,063
Depreciation (note 15) 171 228
Depreciation of right of use asset (note 16) 493 500
Staff costs (note 7) 7,881 8,367
Shared-based payments (note 9) (35) 266
Net exchange gains (including movements on fair value through profit and loss (33) (75)
derivatives)
Movement in inventory provision (17) 67
Intangible asset amortisation (note 14) 634 583
Low value and short-term rentals excluded from right of use asset 70 59
Auditors' remuneration:
- for the audit of the Group and Parent Company Financial Statements 141 132
- non audit fees (tax compliance services) - -
7. Staff costs
27 June 28 June
2025 2024
£'000 £'000
Staff costs (including directors) consist of:
Wages and salaries 6,630 7,123
Social security costs 780 773
Other pension costs 471 471
7,881 8,367
The amount recognised in the Consolidated Statement of Comprehensive Income as
an expense in relation to the Group's defined contribution schemes is
£471,000 (2024: £471,000).
The monthly average number of employees (including directors) during the
period was as follows:
27 June 28 June
2025 2024
By function Number Number
Sales 124 151
Management and administrative 42 40
166 191
The majority of employees are eligible to join the defined contribution
pension plan.
8. Key management personnel
27 June 28 June
2025 2024
£'000 £'000
Short-term employee benefits 683 686
Post employment benefits 25 25
708 711
During the period, retirement benefits were accruing to two directors (2024:
2) in respect of defined contribution pension schemes. Key management
personnel include only the Directors and as such no further disclosures in
respect of compensation are given.
Additional analysis can be found in the Remuneration Committee report.
9. Share-based payments
In the 52 week period ended 27 June 2025 the Group operated an equity-settled
share-based payment plan as described below.
The credit in the period attributed to the plan was £35,000 (2024: charge of
£266,000). The total amount recognised in relation to share based payments is
£632,500 (2024: £668,000).
Under the Virgin Wines UK Plc Long-Term Incentive Plan, the Group gives
performance share awards (PSA) and restricted share awards (RSA) to Directors
and senior staff subject to the achievement of a pre-agreed revenue and net
profit figure for the financial year of the Group, three financial years
subsequent to the date of the award. These shares vest after the delivery of
the audited revenue and profit figure for the relevant financial period has
been announced.
Awards are granted under the plan for no consideration and carry no dividend
or voting rights. Awards are exercisable at the nominal share value of £0.01.
Awards are forfeited if the employee leaves the Group before the awards vest,
except under circumstances where the employee is considered a 'Good Leaver'.
27 June 2025 28 June 2024
Number of share options Number of share options
Share price at issued Share price at issued
Grant date Vesting date Expiration date grant grant
PSA Share Awards
2 May 2025 2 May 2028 2 May 2035 47p 963,101 - -
30 April 2024 30 April 2027 30 April 2034 - - 48p 2,077,748
RSA Share Awards
6 March 2025 6 March 2028 6 March 2035 43p 300,000 - -
Number of Shares Number of Shares
27 June 28 June
2025 2024
Outstanding at start of period 4,189,775 2,811,645
Granted during the period 1,263,101 2,077,748
Lapsed during the period (1,685,544) (564,773)
Exercised during the period (166,132) (134,845)
Outstanding at end of period 3,601,200 4,189,775
Of the above shares, 260,351 were vested and exercisable at 27 June 2025
(2024: 141,369).
The average remaining time for awards to vest is 2.1 years (2024: 2.0 years).
The awards outstanding at 27 June 2025 have a weighted average remaining
contractual life of 9.1 years (2024: 9.1 years).
The fair value at grant date was determined with reference to the share price
at grant date, as there are no market-based performance conditions and the
expected dividend yield is 0%. Therefore there was no separate option pricing
model used to determine the fair value of the awards.
10. Finance income
27 June 28 June
2025 2024
£'000 £'000
Bank interest 725 602
11. Finance costs
27 June 28 June
2025 2024
£'000 £'000
Interest payable for lease liabilities 129 154
12. Taxation
27 June 28 June
2025 2024
£'000 £'000
Analysis of charge for the period
85 -
Current tax
Charge for the year
Total current tax 85 -
Deferred tax
Origination and reversal of timing differences 212 414
Adjustment in respect of prior period (7) (112)
Total deferred tax 205 302
Tax charge on profit on ordinary activities 290 302
Factors that may affect future tax charges:
Deferred taxes at the balance sheet date have been measured using the
effective tax rate (25%).
The tax assessed for the period is lower (2024: lower) than the standard rate
of corporation tax in the UK applied to profit before tax. The differences are
explained below:
27 June 28 June
2025 2024
£'000 £'000
Profit before tax 1,592 1,681
Profit before tax at the standard rate of corporation tax in the UK of 25% 398 420
(period ended 28 June 2024 - 25%)
Effects of:
Expenses not deductible for tax purposes 3 68
Adjustment in respect of prior period (7) (112)
Other permanent differences (104) (74)
Total tax (credit)/charge for the period 290 302
For further information on deferred tax balances see note 17.
13. Earnings per share
Basic and diluted earnings per share are calculated by dividing the earnings
attributable to equity shareholders by the weighted average number of ordinary
shares in issue during the period.
At 27 June 2025 the total number of potentially dilutive shares issued under
the Virgin Wines UK Plc long term incentive plan was 3,601,200 (2024:
4,189,775).
The calculation of basic profit per share is based on the following data:
Statutory EPS
27 June 28 June
2025 2024
Earnings (£'000)
Earnings for the purpose of basic earnings per share 1,302 1,379
Number of shares
Adjusted average number of shares for the purposes of basic earnings per share 55,038,450 55,862,155
Adjusted average number of shares for the purposes of diluted earnings per 57,618,515 58,310,962
share
Basic earnings per ordinary share (pence) 2.4 2.5
Diluted earnings per ordinary share (pence) 2.3 2.4
14. Intangible assets
Goodwill Software Total
£'000 £'000 £'000
Cost
At 1 July 2023 9,623 3,480 13,103
Additions - 415 415
Disposals - (23) (23)
At 28 June 2024 9,623 3,872 13,495
Additions - 832 832
Disposals - - -
27 June 2025 9,623 4,704 14,327
Accumulated amortisation and impairment
At 1 July 2023 - 1,753 1,753
Amortisation charge - 583 583
At 28 June 2024 - 2,336 2,336
Amortisation charge - 634 634
27 June 2025 - 2,970 2,970
Net book value
27 June 2025 9,623 1,734 11,357
28 June 2024 9,623 1,536 11,159
Included within Software is £0.3m (2024: £0.4m) in relation to development
of the Korber warehouse management system, which has a remaining amortisation
period of two years (2024: three years)
Included in Software is £1.7m (2024: £1.2m) of internally generated asset.
Amortisation is charged to administrative expenses in the consolidated
statement of comprehensive income. Software is amortised over its estimated
useful economic life.
The Group is required to test, on an annual basis, whether goodwill has
suffered any impairment. The recoverable amount is determined based on value
in use calculations. The use of this method requires the estimation of future
cash flows and the determination of a discount rate in order to calculate the
present value of the cash flows.
The goodwill figure has been derived from the acquisition of 100% of the share
capital of Virgin Wine Online Limited by Virgin Wines Holding Company Limited
in 2013 and as such there is only one cash-generating unit.
The Group has estimated the value in use of the business as a cash generating
unit based on a discounted cashflow model which adjusts for risks associated
with the assets. The discount rate applied is a pre-tax rate of 14.5% (2024:
15.2%)
The forecasts for the business are based over a 5-year projection period, use
past experience and apply a forecast annual growth rate. The key assumptions
used in the discounting cashflow were the sales and EBITDA figures (based on
board approved plans), the future growth rate (including long-term growth rate
of 2%) and the discount rate.
The Directors have assessed the sensitivity of the impairment test to
reasonably possible changes in the key assumptions described above, and noted
that sufficient headroom existed in all cases.
15.
Property, plant and equipment
Computer hardware & warehouse equipment Fixtures & fittings Total
Leasehold property £'000 £'000 £'000
£'000
Cost
At 1 July 2023 20 980 538 1,538
Additions - 14 14 28
At 28 June 2024 20 994 552 1,566
Additions - 62 17 79
At 27 June 2025 20 1,056 569 1,645
Accumulated depreciation
At 1 July 2023 20 750 366 1,136
Charge for the period - 132 96 228
At 28 June 2024 20 882 462 1,364
Charge for the period - 99 72 171
At 27 June 2025 20 981 534 1,535
Net book value
At 27 June 2025 - 75 35 110
At 28 June 2024 - 112 90 202
Depreciation is charged to administrative expenses in the consolidated
statement of comprehensive income.
16. Right of use assets
The Group leases a number of properties across the UK, in Norwich, Preston and
Bolton.
Computer hardware & warehouse equipment
£'000
Leasehold property Total
£'000 £'000
Cost
At 1 July 2023 5,060 252 5,312
At 28 June 2024 5,060 252 5,312
At 27 June 2025 5,060 252 5,312
Accumulated depreciation
At 1 July 2023 2,357 85 2,442
Charge for the period 450 50 500
At 28 June 2024 2,807 135 2,942
Charge for the period 450 43 493
At 27 June 2025 3,257 178 3,435
Net book value
At 27 June 2025 1,803 74 1,877
At 28 June 2024 2,253 117 2,370
Lease liability
Computer hardware & warehouse equipment
Leasehold property £'000
£'000 Total
£'000
At 1 July 2023 3,082 171 3,253
Interest expense 148 6 154
Lease payments (619) (56) (675)
At 28 July 2024 2,611 121 2,732
Interest expense 125 4 129
Lease payments (620) (48) (668)
At 27 June 2025 2,116 77 2,193
17. Deferred tax
27 June 28 June
2025 2024
£'000 £'000
Brought forward 194 496
Utilisation through income statement (205) (302)
Carried forward (11) 194
The balance comprises temporary differences attributable to:
Fixed asset differences Other timing differences Tax losses Total
£'000 £'000 £'000 £'000
Deferred tax asset at 1 July 2023 95 20 381 496
Recognised in the period through income statement (22) 3 (283) (302)
Deferred tax asset at 28 July 2024 73 23 98 194
Recognised in the period through income statement (116) 9 (98) (205)
Deferred tax (liability)/asset at 27 June 2025 (43) 32 - (11)
The Directors consider that sufficient future taxable profits will be
available and as such deferred tax (liabilities)/assets have been recognised
in full for Virgin Wine Online Limited and Virgin Wines UK Plc.
A deferred tax asset has been recognised on losses in Virgin Wines Holding
Company Limited to the extent to which the losses can be utilised through
group relief. The deferred tax asset not recognised in Virgin Wines Holding
Company is £0.9m (2024: £0.9m).
The deferred tax asset is expected to be utilised in more than one year.
Deferred tax is calculated based on the expected tax rate in force when the
timing differences reverse of 25% (2024: 25%).
18. Inventories
27 June 28 June
2025 2024
£'000 £'000
Finished goods for resale 7,153 5,868
There is no difference between the replacement cost of stocks and carrying
value (28 June 2024: £nil). Inventories are stated after provision for
impairment of £245,000 (2024: £262,000).
19. Trade and other receivables
27 June 28 June
2025 2024
£'000 £'000
Amounts falling due within one year:
Gross carrying amount - trade receivables 1,798 1,040
Loss allowance (5) (6)
Net carrying amount - trade receivables 1,793 1,034
Prepayments 1,183 1,523
Other receivables 65 127
3,041 2,684
Trade receivables are considered past due once they have passed their
contracted due date. Trade receivables and contract assets are assessed for
impairment based upon the expected credit losses model.
The Group applies the IFRS 9 Simplified Approach to measuring expected credit
losses using a lifetime expected credit loss provision for trade receivables
and contract assets. To measure expected credit losses on a collective basis,
trade receivables and contract assets are grouped based on similar credit risk
and aging. The contract assets have similar risk characteristics to the trade
receivables for similar types of contracts.
The expected loss rates are based on the Group's historical credit losses
experienced over the 3 years prior to the period end. The historical loss
rates are then adjusted for current and forward-looking information on
macroeconomic factors affecting the Group's customers.
The average credit period on sales is 30 days after the invoice has been
issued. No interest is charged on outstanding trade receivables.
At 27 June 2025 there was 1 (28 June 2024: 2) customers who owed in excess of
10% of the total trade debtor balance. These customers were operating within
their agreed credit terms and the Directors do not foresee an increased credit
risk associated with these customers. As such no provision for impairment has
been recognised on these balances.
Trade receivables and contract assets are written off where there is no
reasonable expectation of recovery. Indicators that there is no reasonable
expectation of recovery include, amongst others, the failure of a debtor to
engage in a repayment plan with the Group, and a failure to make contractual
payments for a period of greater than 60 days past due. There are no amounts
outstanding on financial assets that were written off during the reporting
period and which are still subject to enforcement activity. Impairment losses
on trade receivables and contract assets are presented as net impairment
losses within operating profit. Subsequent recoveries of amounts previously
written off are credited against the same line item.
Other receivables relates to uncleared sales receipts from customers,
processed in the normal course of business. The maturity analysis of trade
receivables and other debtors is shown below:
27 June 2025 28 June 2024
Gross Provision Net Gross Provision Net
£'000 £'000 £'000 £'000 £'000 £'000
Trade receivables and other debtors
Not yet due 1,743 - 1,743 941 - 941
Overdue 55 (5) 50 99 (6) 93
1,798 (5) 1,793 1,040 (6) 1,034
Movements in the impairment allowance for trade receivables and contract
assets are as follows:
27 June 28 June
2025 2024
£'000 £'000
Opening provision for impairment of trade receivables and contract assets 6 7
Recovered provided debt (5) (4)
Increase during the period 5 5
Write off of provided debt (1) (2)
Carried forward 5 6
20. Cash and cash equivalents
Included in Cash and cash equivalents is a balance of £8.3m (28 June 2024:
£8.1m) relating to advance payments received from WineBank customers. The
corresponding creditor to customers is included in contract liabilities.
£5.4m of the cash balance is held on 95 day notice (2024: £5.1m) at
preferential interest rates between 4.3% and 4.4% (28 June 2024: 5.4%).
21. Trade and other payables
27 June 28 June
2025 2024
£'000 £'000
Trade payables 2,511 2,398
Taxation and social security 2,458 1,675
Contract liabilities 8,876 8,703
Accruals and other creditors 2,029 1,649
15,874 14,425
The Directors consider the fair value of creditors to be equal to the book
value given their short term nature.
22. Provisions
Leasehold dilapidation provision
27 June 28 June
2025 2024
£'000 £'000
Brought forward 367 321
Charged in income statement 46 46
Carried forward 413 367
Leasehold dilapidations relate to the estimated cost of returning a leasehold
property to its original state at the end of the lease as a result of general
'wear and tear'. The cost is recognised as an expense in the Consolidated
Statement of Comprehensive Income and accrued for over the term of the lease,
on the basis that the 'wear and tear' increases over the period of the lease.
The main uncertainty relates to estimating the cost that will be incurred at
the end of the lease.
Maturity analysis for provisions
Dilapidation provisions are expected to mature at the end of the lease term as
follows:
27 June 28 June
2025 2024
£'000 £'000
October 2026 292 271
August 2030 121 96
413 367
23. Financial instruments and financial risk management
The principal financial instruments used by the Group, from which financial
instrument risk arises, are as follows:
· trade and other receivables;
· cash and cash equivalents;
· trade and other payables; and
· lease liabilities.
The existence of these financial instruments exposes the Group to the
following financial risks:
· credit risk;
· liquidity risk;
· foreign currency risk; and
· capital management.
The Group's financial instruments may be analysed as follows:
27 June 28 June
2025 2024
£'000 £'000
Trade and other receivables 1,858 1,161
Cash and cash equivalents 17,579 18,370
Financial assets measured at amortised cost 19,437 19,531
27 June 28 June
2025 2024
£'000 £'000
Derivative financial liabilities measured at fair value through profit or loss (6) (3)
Financial liabilities measured at fair value through comprehensive income (6) (3)
27 June 28 June
2025 2024
£'000 £'000
Trade and other payables, excluding non-financial liabilities (4,540) (4,047)
Lease liabilities (2,193) (2,732)
Financial liabilities measured at amortised cost (6,733) (6,779)
Financial assets which are debt measured at amortised cost comprise trade
receivables, other debtors and cash and cash equivalents.
Financial assets measured at fair value through comprehensive income represent
the Group's derivative financial instruments, being foreign exchange forward
contracts.
Financial liabilities measured at amortised cost comprise trade payables,
accruals and other creditors, lease liabilities and loans and borrowings.
Credit risk
The Group's maximum exposure to credit risk is limited to the carrying amount
of the financial assets recognised at the reporting date, as summarised below:
27 June 28 June
2025 2024
£'000 £'000
Financial assets measured at amortised cost 19,437 19,531
The Group's cash and cash equivalents are all held on deposit with leading
international banks and hence the Directors consider the credit risk
associated with such balances to be low.
The Group provides credit to customers in the normal course of business. The
principal credit risk therefore arises from the Groups trade receivables. In
order to manage credit risk the Directors set credit limits for corporate
customers based on a combination of payment history, credit references and a
financial review of the business. Credit limits are reviewed on a regular
basis in conjunction with debtor ageing and payment history. Historic credit
losses of the Group have been negligible as referenced in note 19.
Details of the trade receivables impairment policy can be found in note 19.
Liquidity risk
Liquidity risk arises from the Group's management of working capital and the
amount of funding required for growth. It is the risk that the Group will
encounter difficulty in meeting its financial obligations as they fall due.
The Group manages its cash and borrowing requirements through preparation of
annual cash flow forecasts reflecting known commitments and anticipated
projects in order to maximise interest income and minimise interest expense,
whilst ensuring that the Group has sufficient liquid resources to meet the
operating needs of the Group. Borrowing facilities are arranged as necessary
to finance requirements.
The following table shows the maturities of gross undiscounted cash flows of
financial liabilities as at 27 June 2025:
Carrying amount Contractual
£'000 cash flows <1 year 1-5 years >5 years
£'000 £'000 £'000 £'000
Non-derivative financial liabilities:
Trade and other payables 4,540 4,540 4,540 - -
Lease liabilities 2,193 2,534 656 1,527 351
6,733 7,074 5,196 1,527 351
Derivative financial liabilities:
Foreign currency forwards
(Inflow) (1,717) (1,717) - -
Outflow 1,711 1,711 - -
(6) (6) (6) - -
Total 6,727 7,068 5,190 1,527 351
Contractual maturities of financial liabilities as at 28 June 2024 are as
follows:
Carrying amount Contractual <1 year 1-5 years >5 years
£'000 cash flows £'000 £'000 £'000
£'000
Non-derivative financial liabilities:
Trade and other payables 4,047 4,047 4,047 - -
Lease liabilities 2,732 3,197 667 1,804 726
6,779 7,244 4,714 1,804 726
Derivative financial liabilities:
Foreign currency forwards
(Inflow) (1,568) (1,568) - -
Outflow 1,565 1,565 - -
(3) (3) (3) - -
Total 6,776 7,241 4,711 1,804 726
Foreign currency risk
Foreign exchange risk is the risk that movements in exchange rates affect the
profitability of the business. The Group purchases goods from overseas
suppliers and is invoiced in currencies other than GBP. It is therefore
exposed to movements in the GBP exchange rate against the currencies in which
suppliers invoice the Group. The Group monitors exchange rate movements
closely and ensures adequate funds are maintained in appropriate currencies to
meet known liabilities.
The Group enters into forward foreign currency contracts to mitigate the
exchange rate risk for certain foreign currency payables. At 27 June 2025, the
outstanding contracts all mature within 6 months (2024: 6 months) of the
period end. The Group is committed to buy Euro and Australian Dollars (2024:
Euro and Australian dollars) with a Sterling value of £1.72m (2024: £1.57m).
The forward currency contracts are measured at fair value, by reference to the
spot rate. This is a level 1 valuation in that the spot rate is a directly
observable input.
The Group's exposure to foreign currency risk at the end of the respective
reporting period (after the effect of forward contracts disclosed above) was
as follows:
27 June 28 June
2025 2024
£'000 £'000
AUS 1 -
Total 1 -
Liabilities include the monetary assets and liabilities of subsidiaries
denominated in foreign currency.
The Group is exposed to foreign currency risk on the relationship between the
functional currencies of Group companies and the other currencies in which the
Group's material assets and liabilities are denominated. The table below
summarises the effect on reserves had the functional currencies of the Group
weakened or strengthened against these other currencies, with all other
variables held constant.
27 June 28 June
2025 2024
£'000 £'000
Loss on 10% strengthening of functional currency (87) (75)
Gain on 10% weakening of functional currency 106 91
Capital risk management
The Group's capital management objectives are:
· to ensure the Group's ability to continue as a going concern so
that it can continue to provide returns for shareholders and benefits for
other stakeholders; and
· to provide an adequate return to shareholders by pricing products
and services commensurate with the level of risk.
To meet these objectives, the Group reviews the budgets and forecasts on a
regular basis to ensure there is sufficient capital to meet the needs of the
Group.
The capital structure of the Group consists of shareholders' equity as set out
in the Consolidated Statement of Changes in Equity. All working capital
requirements are financed from existing cash resources.
27 June 28 June
2025 2024
£'000 £'000
Cash net of lease liabilities (note 25) 15,386 15,638
Equity 22,620 23,320
24. Share capital
27 June 28 June
2025 2024
£'000 £'000
Authorised, allotted, called up and fully paid
560 560
55,972,405 (2024: 55,972,405) ordinary shares of £0.01 each
On 2 March 2021 the Group underwent a reorganisation in which Virgin Wines UK
plc became the ultimate parent undertaking of the Group. As part of the
reorganisation 6,615,413 new Ordinary Shares of £0.01 each were created.
The new shares were fully paid and will rank pari passu in all respects with
the existing Ordinary Shares, including the right to receive all dividends and
other distributions. £0.98m of costs in relation to the issue of new shares
have been charged to the share premium account.
During the year no (2024: 134,845) Ordinary Shares of £0.01 were issued by
Virgin Wines UK plc.
During the year Virgin Wines UK plc acquired 4,112,651 (2024: 310,735) of its
Ordinary Shares of £0.01 for £1,968,476 (2024: £149,547). At 27 June 2025
4,257,254 ordinary shares of £0.01 (2024: 310,735) were held in treasury
within the Group.
The Directors have not approved and interim dividend and do not recommend the
payment of a final dividend (2024: nil).
25. Analysis and reconciliation of cash net of lease liabilities
This section sets out an analysis of the movements in net cash, which includes
cash and cash equivalents and liabilities arising from financing activities.
1 July New leases Other non-cash Cashflow 28 June
2023 £'000 changes £'000 2024
£'000 £'000 £'000
Cash at bank and in hand 13,514 - - 4,856 18,370
Lease liabilities (3,253) - (154) 675 (2,732)
Cash net of lease liabilities 10,261 - (154) 5,531 15,638
Decrease in cash in the period 4,856
Lease interest (154)
Lease payments 675
Movement in cash net of lease liabilities in the period 5,377
Cash net of lease liabilities at 1 July 2023 10,261
At 28 June 2024 15,638
29 June New leases Other non-cash 27 June
2024 £'000 changes Cashflow 2025
£'000 £'000 £'000 £'000
Cash at bank and in hand 18,370 - - (791) 17,579
Lease liabilities (2,732) - (129) 668 (2,193)
Cash net of lease liabilities 15,638 - (129) (123) 15,386
Decrease in cash in the period (791)
Lease interest (129)
Lease payments 668
Movement in cash net of lease liabilities in the period (252)
Cash net of lease liabilities at 28 June 2024 15,638
At 27 June 2025 15,386
26. Related Party disclosures
During the period ended 27 June 2025, sales of £839,500 (2024: £756,770)
were made by Virgin Wines UK plc to Virgin Wine Online Limited. These have
been eliminated on consolidation.
Balances between the Company and its subsidiaries, which are related parties,
have been eliminated on consolidation. Details of remuneration of key
management personnel can be found in note 7.
During the period the Group paid £47,198 (2024: £46,948) in monitoring fees
and expenses to Gresham House Asset Management Limited. At 27 June 2025 a nil
balance (2024: £3,900) was due to Gresham House Asset management Limited.
Gresham House Asset Management Limited has significant control over the Group
by virtue of their appointment of a board member.
During the period sales of £28,668 (2024: £22,803) were made to LKB
Enterprises Limited. At 27 June 2025 £9,636 (2024: £3,715) remaining
outstanding from LKB Enterprises Limited, a company in which Virgin Wines UK
plc's CEO's wife has significant control.
27. Ultimate parent undertaking
In the opinion of the directors, there is no single controlling party.
28. Events after the end of the reporting period
There have been no matters arising after the balance sheet date that would
require disclosure in the financial statements.
29. Capital commitments and contingent liabilities
There are no capital commitments and no contingent liabilities not provided
for in the financial statements for the period ended and as at 27 June 2025 or
28 June 2024.
The Group has a bank guarantee in place of £0.1m in relation to the operation
of its bonded warehouses.
30. Nature of each reserve
Share premium
Amount subscribed for share capital in excess of nominal value.
Own shares reserve
Nominal value of shares held in treasury.
Merger reserve
The difference between the nominal value of shares issued in exchange for the
book value of assets acquired.
Share-based payment reserve
The movements on share based payments.
Retained earnings
All other net gains and losses and transactions with owners (e.g. dividends)
not recognised elsewhere.
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