Virgin Wines upgrades FY expectations amid strong demand
AIM-listed Virgin Wines upgraded its full-year sales and profit expectations on Thursday amid solid demand.
In an update for the year ending 30 June 2021, the company said the strong levels of customer demand seen in the first half have been maintained so far in the second. As a result, it now anticipates revenue and profitability for FY21 will be ahead of its previous expectations, with turnover for the year set to be no less than £73m and an improvement in EBITDA margin.
Virgin Wines said that while it remains mindful of the potential impact from the easing of lockdown restrictions on consumer spending patterns, it is confident the underlying growth drivers being seen by the direct-to-customer wine sector, and the accelerated shift in consumer behaviour towards online retailing, will continue.
Chief executive officer Jay Wright said: "We have been encouraged by the strong customer demand for our wines, alongside growth in our new range of beers and spirits, driven by the ongoing shift in consumer behaviour towards online retailing.
"The group remains well positioned to continue to deliver on our long term growth strategy, underpinned by our unique wine sourcing model and unrivalled consumer propositions, alongside our continued focus on all aspects of the customer experience and growth in our customer base."
House broker Liberum said: "It is likely the group will start FY22 with a larger customer base than we had expected, new revenue channels continue to perform well and the predictable behaviour patterns until now suggest a confident outlook.
"With positive earnings momentum coming from margin expansion and better top-line, we increase our target price to 300p from 280p and reiterate strong buy."
Liberum said the company’s expectations for turnover to be less than £73m are 4% ahead of its estimate. In addition, the new sales expectations imply 29.3% sales growth in FY21 versus 33% growth in FY20.