Virgin Wines revenue jumps in 'milestone year'
Virgin Wines UK reported a 30% improvement in group revenue in its annual results on Thursday, to £73.6m, making for the second consecutive year of higher-than-30% revenue growth.
The AIM-traded firm also noted that revenue increased 73% from the 2019 financial year, pre-pandemic, with the growth driven by “strong levels” of customer demand, increased investment in customer acquisition, and strong customer loyalty.
Virgin Wines said revenue growth was consistent across all sales channels and business segments in the year ended 30 June, with repeat direct-to-consumer (D2C) revenues up 31.5%, commercial revenue ahead 72.8%, and gift revenue rising 75%.
Its sales retention rate was 113%, up slightly from the 112% it reported in the 2020 financial year, which the board said showed “strong levels” of customer loyalty.
Virgin Wines reported a gross profit margin of 31.6%, up from 30.3%, with the 1.3 percentage point increase driven by the increased proportion of repeat D2C sales as a percentage of total revenue.
Adjusted EBITDA improved to £7m from £4.8m, representing an adjusted EBITDA margin of 9.5%.
Profit before tax and exceptional items increased 86% to £5.2m, as the company reported a “robust” balance sheet, with net cash of £5.1m as at 30 June.
The board put that down to continued high rates of cash conversion, and a “tightly-managed” balance sheet.
“The 2021 financial year has been a transformational year for the group, starting a new chapter on the public markets and emerging in a stronger financial position,” said chief executive officer Jay Wright.
“I would again like to wholeheartedly thank everyone across the business for their continued commitment and support, particularly in such an unprecedented time.
“We have made a number of changes to the way we work together as a business to ensure we serve our customers efficiently, and our teams have shown great skill and adaptability, while keeping each other safe.”
Wright said the company’s focus this year was on acquiring increased numbers of new customers, converting them to become long-term advocates of Virgin Wines, while maximising the loyalty of its existing customers, and in turn driving growth in its overall customer base.
“I am delighted that all of these objectives were met and that all our core trading channels have seen substantial year-on-year growth.
“We have also seen substantial growth in our gift and commercial channels, made significant headway in developing our craft beer and quality spirit offerings, all whilst continuing to deliver the very highest levels of customer service.”
Following the milestone year, Jay Wright said the company was looking to maintain its “exciting momentum” and drive the business further towards achieving its “significant” potential over the next 12 months.
“Whilst we remain mindful of the potential impact from the easing of lockdown restrictions on consumer spending patterns, recent customer retention data has proven promising and we are confident that Virgin Wines, underpinned by underlying, subscription-weighted growth drivers, its strong brand and unique customer proposition remains well placed to take advantage of future consumer trends.”
At 0948 BST, shares in Virgin Wines were up 5.43% at 194p.