Virgin Wines: Share price falls and major review announced after Christmas ‘challenges’ drink into profits
Virgin Wines‘ share price tumbled this morning as the online wine bank reveals it is undertaking a full review after a shift in consumer confidence which knocked profits in the first quarter.
Shares in the online wine retailer slumped 1.50 per cent when the market opened this morning as the group revealed its profits before tax of just £0.1m down from £3.9m in 2022.
The group said it was undertaking a full business review to ensure it was “fully leveraging the opportunities available” and to help position itself as “positively as possible for future growth and profitability”.
The listed wine seller posted revenues of £33.6m for the six months ending 31 December 2022 down from £40.6m in the same period last year.
Virgin Wines said against the background of soaring inflation and the cost of living crisis, its net cash was down to £7.6m from £7.8m in July 2022.
“As previously announced in our year-end trading update, profitability was impacted during the first half, with a number of macroeconomic headwinds exacerbating certain internal and operational challenges which we encountered particularly over our peak Christmas trading period,” Jay Wright, chief executive at Virgin Wines, said.
The company, which is a subsidiary of Virgin Group, said it generated 60,000 new customers over the period and recruitment onto its WineBank offering was up 21 per cent year on year.
Wright added: “We continue to make progress on addressing the challenges where we can, and we remain confident in the future growth prospects of Virgin Wines.
“This is underpinned by the fundamental strength of our business model and consumer proposition, with our customers remaining loyal and ever-increasing numbers signing up to our WineBank subscription scheme.”