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Virgin recovers from end of year blip

Published:  17 July, 2023

Virgin Wines, one of the UK’s largest direct-to-consumer online wine retailers, has reported an end of year performance “in line with expectations”, following a “disappointing” downturn resulting from short term challenges at the end of 2022.

Total revenue at the major online e-tailer ended the year to 30 June 2023 at £59 million. At the same time, the company reports a strong balance sheet with net cash of £5.5m and no debt.

The company puts the performance largely down to its ability to successfully execute its strategic approach to customer acquisition – marking a return to fortunes after a disappointing six months to 31 December 2022.

CEO Jay Wright described those results as “one-off exceptional circumstances”, which were impacted by the postal strikes and bad weather in the lead-up to Christmas. According to Virgin, several couriers brought forward delivery cut-off dates and reduced trailer capacity. It is estimated that the impact of these factors on the company resulted in approximately £1.5m in lost revenue.

The business ended the financial year on a more positive note, with more than 90,000 new customers acquired and conversion/cancellation rates also trending positively during Q4.

“Despite the inflationary environment, we have delivered results in line with expectations,” Wright said.

“Looking ahead, we remain confident in the underlying business model and opportunities for future growth into FY 2024 and beyond. We are well-positioned due to the uniquely sourced, high-quality nature of our wines, coupled with our market-leading expertise and strong foundations.”

The business’s flagship WineBank scheme also continues to be resilient.

While Wright acknowledged “challenging market conditions”, the focus is now on delivering on the core pillars that have enabled the group to generate “consistent growth and profitability”.

Most recently, this has included further progress in its commercial channel, with key strategic and commercial partnerships agreed during the past year, including WH Smith Travel.

As previously announced, the company also continues to develop a number of new initiatives focused on accelerating its strategic development, which it expects to complete during H1 2024. Further details will be announced at the Full Year Results in October.