25th Oct 2023 14:38
(Alliance News) - Virgin Wines UK PLC on Wednesday said it continues to expect double-digit sales growth and improving profit margins in the year ahead, as it put behind a difficult period that brought "a number of challenges".
Norwich, England-based online wine retailer swung to a pretax loss of GBP737,000 in the financial year that ended June 30 from a GBP5.1 million profit the year before.
Revenue declined by 15% to GBP59.0 million from GBP69.2 million, while administrative expenses increased by 37% to GBP6.0 million from GBP4.4 million.
The company also took a GBP990,000 exceptional cost to sort out of problems caused by the roll-out of a new warehouse management system. Moving into the new year, however, Virgin Wines said the WMS was helping to reduce its costs.
Adjusted pretax profit in the recent year was GBP600,000, down from GBP5.2 million the year before.
Looking ahead, Virgin Wine said sales were up 12% in the first quarter of financial 2024. It still expects double-digit sales growth for all of the new year.
Margin at the earnings before interest, tax, depreciation and amortisation level are expected to be 4% to 5%, as inflation eases, particularly for the cost of freight and glass. Adjusted Ebitda margin was 3.0% in financial 2023, narrowed significantly from 9.0% in financial 2022.
"FY23 has been a year affected by a number of challenges, from well-documented macroeconomic headwinds to a number of one-off, exceptional issues, most specifically relating to the implementation of our new warehouse management system in H1," commented Chief Executive Officer Jay Wright.
"Despite this, we have continued to grow our WineBank membership, maintain excellent discipline in our customer acquisition channel and deliver a healthy balance sheet."
Shares in Virgin Wines were down 11% at 36.38 pence on Wednesday afternoon in London. The stock is down 27% over the past 12 months.
By Tom Waite, Alliance News editor
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