12th Jan 2023 13:09
(Alliance News) - Two pandemic winners that have since found joy hard to come by moved in opposite directions on the stock market on Thursday.
ProCook Group PLC shares climbed, and Virgin Wines UK PLC shares fell. ProCook rose 9.2% to 31.11 pence around midday in London. Virgin Wines lost 24%, trading at 54.94p.
Their fortunes over Christmas differed massively, partly thanks to ProCook's high-street presence. Royal Mail strikes hurt online-only retailer Virgin Wines badly.
For high-end pots-and-pans seller, it was a decent trading stretch, defying the cost-of-living gloom that has hit sales of its products since Covid curbs ended.
For the third quarter ended January 8, ProCook revenue fell 2.5% year-on-year to GBP22.4 million. Excluding contributions from e-commerce channel Amazon, where it has discontinued sales, revenue improved 0.8%.
During the final four weeks of the quarter, ProCook said revenue improved 2.9% year-on-year, or 5.9% without Amazon.
The update may restore some market confidence in the stock, though it remains some 80% lower over the past 12 months and 78% off its 145p initial public offering price.
The trading statement also was not quite enough to prompt Peel Hunt to lift its earnings forecast for the company. It is positive on the stock, though, with a 'buy' rating on ProCook shares.
"It was a better month, but with the consumer a hard book to read right now, and headwinds from costs still a factor, we make no changes to forecasts today. Forecast momentum has not been great since the float, but we have always maintained that this is a fine business that is winning market share and disrupting the sub-sector with its impressive value for money offer," Peel said.
Virgin Wines said revenue in the six months ended December 31 was GBP33.7 million, down 17% from GBP40.5 million for the same period last year.
The company said sales were impacted by some one-off factors, particularly over the Christmas trading period."
Virgin Wines said sales in the Christmas period were hurt by postal strikes and bad weather. The company estimated lost revenue to be about GBP1.5 million.
Like ProCook, it has struggled with a return to normality after the pandemic.
Liberum is optimistic, however. It expects Virgin Wines to enjoy a trading bounce as the one-off hits ebb.
"We look towards the second half with confidence as the internal issues are close to being resolved and the growth dynamics and strategy remain intact. While we factor for a softer consumer spending environment and reflect this in our forecasts, the shares are cheap," Liberum added.
It rates Virgin Wines at 'buy' with a 100p price target.
Virgin Wines shares have fallen 74% over the past year. They are down 72% from in March 2021 IPO price of 197p.
By Eric Cunha, Alliance News news editor
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