22nd Jan 2024 10:41
(Alliance News) - Virgin Wines UK PLC on Monday said a rise in sales amid cost control brought doubled earnings in the first half of its financial year.
Norwich, England-based Virgin Wines is one of the UK's largest direct-to-consumer online wine retailers. It offers nearly 700 different wines and about 150 spirits to an active customer base of more than 170,000.
Revenue in the six months that ended December 29 was GBP34.2 million, up 2.1% from GBP33.6 million a year before. Earnings before interest, tax, depreciation and amortisation jumped to GBP1.8 million from GBP800,000, as Virgin Wines said "stringent cost management" brought operating variable costs down by 15% from a year before.
Virgin Wine said it focused its marketing resources on acquiring "high-quality" new customers. This led to a 22% increase in its new customer conversion rate and a 14% reduction in cost per acquisition.
Cash reserves benefited as well. Gross cash, including deposits for its Wine Bank subscription plan, was GBP17.4 million on December 29, up from GBP14.1 million a year before and GBP13.5 million at the end of June. Net cash, excluding those deposits, was GBP11.0 million, up from GBP7.6 million and GBP5.5 million, respectively. Virgin Wine has no net debt.
Looking ahead, Virgin Wine said it is confident in delivering a "positive" full-year business performance in line with market expectations.
"Whilst new customer acquisition remains challenging, we have maintained our disciplined approach, and our new Warehouse Wines value offering which launched in late October has had an encouraging initial response," said Chief Executive Officer Jay Wright.
Virgin Wine shares were up 1.1% at 38.40 pence Monday morning in London.
By Tom Waite, Alliance News editor
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