Uk (Commonwealth) _Virgin Wines, an online wine retailer that sells directly to consumers, has reported an increase in its half-year profits and sales. Underlying EBITDA jumped by 122% to £1.76 million in the six months ending December 29, while overall sales grew by 2% to £34.3 million. Pre-tax profit increased from £0.1 million to £1.1 million over the same period previous year.
Virgin Wines credited improved gross margins, a considerable decrease in operational variables, and “prudent” cost control in their efforts to attract new clients for the higher profit in addition to the sales rise. While the company’s B2B division saw a 6.5% increase in revenue over the same time last year, sales through direct-to-consumer channels increased by 4.5%.
Virgin Wines CEO Jay Wright expressed his company’s satisfaction with the first half results, stating that the introduction of key strategic initiatives has improved the company’s position to achieve future growth and that the underlying business performed well, even during the busy Christmas season.
Despite macroeconomic worries, our client base is still engaged and loyal, and our cancellation rates are still trending favorably. Virgin Wines stated that it is still optimistic about achieving a strong year-over-year performance and a full-year profit that meets projections. in spite of a difficult consumer climate.
Wright continued, saying, “We continue to be optimistic about the group’s future prospects. Our new offering, Warehouse Wines, has drawn in over 2,000 “lapsed” clients and shown good early results. We have also gotten favorable feedback regarding our rebranding.
In accordance with market expectations, we anticipate turning a profit for the entire year in 2024. Going forward, we’ll keep an eye out for possibilities to maintain our current growth trajectory. Virgin Wines, an online wine store, released a positive trading statement on December 29, 2023, following a six-month period of increased revenue and profitability.
The company saw a 2% increase in overall revenue to £34.3 million, with sales to returning customers rising by about 5% and commercial revenue rising by 6.5%. .. Virgin Wines stated that this was accomplished in spite of a weak consumer economy by maintaining a “disciplined approach” to customer acquisition and concentrating its resources on bringing on “high quality” new clients. According to reports, this resulted in a 14% drop in the fully costed cost per acquisition and a 22% rise in the new client conversion rate.
In the meanwhile, the group’s EBITDA increased by 122% to £1.75 million, or a 5.0% margin. Revenue growth and “tight” cost control were the main drivers of this, with operational variable expenses declining by 14.5% annually.
Regarding the future, Virgin Wines expressed confidence in its ability to meet market expectations and produce a strong result this year. Our fundamental trading, excellent product line, operational effectiveness, devoted clientele, and tested company plan all reinforce this confidence, it continued.
The business stated that its development possibilities would be supported by other strategic initiatives it is undertaking, such as the introduction of Warehouse Wines. Jay Wright, the CEO, expressed his satisfaction with the first-half results, highlighting the notable increase in profitability.
“We made significant improvements in our warehouse operations, achieving a planned reduction in fulfilment costs, while maintaining an excellent next-day delivery service throughout the busy peak trading period,” he continued, referring to the operational issues faced the previous year.
Even if it’s still difficult to acquire new clients, we’ve remained diligent and our new Warehouse Wines bargain offer, which debuted in late October, has had and received a positive response thus far. Encouraged by our success and in keeping with the primary tenets of our business strategy, we enter the second half while keeping an eye on the difficult consumer landscape.
Rival online store Naked Wines revealed last week that it will be slashing staff in an effort to save expenses following a further decline in sales. UK-based Virgin Wines Online Limited, doing business as Virgin Wines, is an online wine merchant.
The Virgin Group, led by Richard Branson, founded the business in 2000, and Direct Wines acquired it in 2005. A combined financing and equity package was given to the company in November 2013 by CEO Jay Wright and the management group with assistance from Mobeus Equity Partners and Connection Capital.
