Virgin Wines revenues surge 55% to £40.5m

Virgin Wines UK plc, the online wine retailer, has reported its revenues surged 55% to £40.5m in the six months ending 31 December 2021, compared to £26.2m in H1 FY20.

The group also witnessed repeat sales from core channels growing 6.2% year-on-year to £29.6m, and up 59% compared to H1 FY20.

It also delivered growth across its subscription schemes, with customers on its flagship WineBank service delivering a 28% increase in revenue, performing “ahead of expectations”. 

Virgin Wines’ subscription schemes are reportedly a “key driver” of its direct-to-consumer (D2C) sales channel which represented 82% of total group revenue in the period. Total subscription revenues accounted for 79% of D2C sales in the period, up from 69% in H1 2021.

Additionally, the commercial arm of the business also traded ahead of expectations, with partnerships with Moonpig, Virgin Money, Avanti and LNER seeing sales growth of 25% compared to H1 FY21.

Meanwhile, Virgin Wines reportedly experienced operational challenges in the period due to labour market shortages caused by the Omicron variant, staff absences due to illness and self-isolation, freight disruption and inflationary pressures.

Due to the “uncertain” trading and increased cost pressure, the group now expects revenue and profit for the year ending June 2022 to be “slightly below” consensus market estimates.

Jay Wright, CEO at Virgin Wines, said: “As expected, the trading environment has evolved considerably over recent months, and given strong prior year comparatives, we have worked hard to maintain encouraging growth from our core sales channels, whilst maintaining strict discipline around our customer acquisition and our cost control.  

“We were delighted to ship more than 7 million bottles of wine during the period and to deliver sizable growth in our customer base with strong levels of customer conversion and retention. Despite current headwinds, we look forward to the future with optimism.”