TIDMVINO
RNS Number : 3621A
Virgin Wines UK PLC
22 January 2024
22 January 2024
Virgin Wines UK plc
("Virgin Wines", the "Company" or the "Group")
Trading Update
Good Christmas period provides strong momentum; maintain FY24
expectations
Virgin Wines UK plc (AIM: VINO), one of the UK's largest
direct-to-consumer online wine retailers, is pleased to announce a
trading update for the six months ended 29 December 2023 (the
"Period"), with a positive performance that saw year-on-year
revenue growth, a significant increase in profitability, strong
cash generation and excellent efficiencies in its operational
performance.
Total revenue in H1 2024 was GBP34.3m (H1 2023: GBP33.6m),
representing 2% YOY growth, with sales to repeat customers up c.5%
and commercial revenue up 6.5%. This was achieved despite a subdued
consumer economic landscape. In this environment, the business
continued to take a disciplined approach to customer acquisition
and focused its resources on acquiring high quality new customers.
This led to a 22% increase in the new customer conversion rate and
a decrease of 14% on the fully costed cost per acquisition.
The Group achieved a significant improvement in profitability
during the Period. EBITDA* increased by 122% to GBP1.75m (H1 2023:
GBP0.8m), representing an EBITDA margin of 5.0% (H1 2023: 2.3%),
driven by revenue growth and stringent cost management, with
operating variable costs falling by 14.5% year-on-year.
Conversion and cancellation rates continued to improve, with the
conversion rate at 50% by the end of December 2023 (2022: 41.1%)
and the cancellation rate at 16.8% (2022: 17.8%) for the flagship
WineBank scheme. The new Warehouse Management System, implemented
during the prior year, operated smoothly and drove a warehouse cost
per case reduction of 25% during the Period.
The Group has no net borrowings, maintains a strong balance
sheet and generated a positive cash return across H1 2024. Gross
cash (including Wine Bank Deposits) at the Period end was GBP17.4m
(December 2022: GBP14.1m and June 2023: GBP13.5m). Net cash (which
excludes Wine Bank Deposits) improved by GBP3.4m to GBP11.0m at the
Period end (December 2022: GBP7.6m and June 2023: GBP5.5m).
The Group continues to manage inventory and working capital in
line with business requirements. Inventories at 29 December 2023
were GBP8.4m, a decline of GBP2.6m from GBP11.0m in December
2022.
FY24 outlook
The Board remains confident of the Group's prospects in
delivering a positive 2024 performance in line with current market
expectations. This confidence is supported by our underlying
trading, high-quality product range, operational efficiency, loyal
customer base and proven business model.
The Board believes the robust and resilient nature of the
business model and the strong balance sheet leave it well
positioned.
Furthermore, the strategic initiatives that are being pursued,
including the launch of Warehouse Wines, give further optimism
around the Group's growth prospects and we look forward to
providing more detail on the progress of these in the coming
months.
Jay Wright, Chief Executive Officer at Virgin Wines,
commented:
"We are pleased with our performance through the first half of
our financial year, particularly our strong profitability despite
the challenging trading environment, with EBITDA representing over
5% of revenue. Following operational challenges last year, we made
significant improvements in our warehouse operations, achieving a
planned reduction in fulfillment costs, while maintaining an
excellent next day delivery service throughout the busy peak
trading period. We have remained debt free and cash generative,
holding GBP17.4m of gross cash and GBP11.0m of net cash whilst
reducing our inventory levels by 24% YOY.
Our existing customer base continues to be active and loyal,
with revenue from repeat sales channels up c.5% YOY and the
cancellation rate of our key WineBank subscription base at an
18-month low. Whilst new customer acquisition remains challenging,
we have maintained our disciplined approach, and our new Warehouse
Wines value offering which launched in late October has had an
encouraging initial response. We go into the second half encouraged
by our performance and in line with the key drivers behind our
business model, whilst remaining mindful of the challenging
consumer landscape."
* EBITDA excludes share-based payments.
- Ends -
Enquiries:
Virgin Wines UK plc Via Hudson Sandler
Jay Wright, CEO
Graeme Weir, CFO
Liberum Capital Limited
(Nominated Adviser and Sole Broker)
Edward Thomas
Dru Danford
John Fishley
Hudson Sandler
(Public Relations)
Alex Brennan
Dan de Belder
Charlotte Cobb
Harry Griffiths
Tel: +44 20 3100 2222
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, which is headquartered in Norwich, UK, was
established in 2000 by the Virgin Group and was subsequently
acquired by Direct Wines in 2005 before being bought out by the
Virgin Wines management team, led by CEO Jay Wright and CFO Graeme
Weir, in 2013. It listed on the London Stock Exchange's Alternative
Investment Market (AIM) in 2021.
Virgin Wines has almost 700 wines and c. 150 spirits in its
portfolio which it sells to an active customer base of more than
170,000 members. It has approximately 200 employees and more than
40 trusted winemaking partners and suppliers around the world.
The Company drives the majority of its revenue though its
fast-growing 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.
Along with its extensive range of award-winning products, Virgin
Wines was delighted to be named Online Drinks Retailer of the Year
for 2022 at last year's Drinks Retailing Awards, as well as
receiving the bronze award for Contact Centre of the Year at the
2022 UK National Contact Centre Awards. In addition, in 2023 the
Group's Head of Buying, Sophie Lord, was also named Buyer of the
Year by Decanter magazine.
https://www.virginwinesplc.co.uk/
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END
TSTSFAFAUELSESF
(END) Dow Jones Newswires
January 22, 2024 02:00 ET (07:00 GMT)
Virgin Wines Uk (LSE:VINO)
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