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Virgin Wines UK PLC on Wednesday reported strong results for the year despite the impact of the cost of living crisis as it expects customers to continue drinking from home into the next year.
In the year that ended July 1, Virgin Wines's pretax profit multiplied to £5.1 million from £1.7 million the year before. However, after adjusting for exceptional costs last year, profit fell slightly year-on-year from £5.2 million. The exceptional costs relate to £3.5 million in IPO fees.
Shares in Virgin Wines were trading 5.1% higher at 52.00 pence each in London on Wednesday morning.
The direct-to-consumer online wine retailer's revenue slipped 6% to £69.2 million from £73.6 million last year. It was still 63% above levels in the 2019 financial year, solidifying much of the uplift from the pre-Covid period.
The WineBank scheme supplied £38.5 million of this, up 21% from £31.8 million last year. WineBank membership was up 8%. WineBank is a scheme in which customers pay money into an account which earns 20% interest. That money can then be used to purchase other wines.
Virgin Wines said it acquired 105,000 new customers in the 2022 financial year, 5% ahead of expectations. The rate of new customer acquisition in the fourth quarter was 37% ahead of the same period last year, delivering "strong momentum" into 2023.
Chief Executive Officer Jay Wright said: "Despite widely documented macroeconomic challenges and consumer uncertainty, Virgin Wines has continued to show its resilience and strong positioning in the direct-to-consumer online wine retail sector. Our business model and disciplined approach to new customer acquisitions has enabled us to retain much of the substantial growth achieved during the Covid-19 lockdowns, with almost 1 million cases sold in FY22, and we remain market-leading both in terms of our customer proposition and our profitability.
"In the context of a severe cost of living crisis, we also believe that our wines represent an affordable treat compared to the cost of alternative options such as going to pubs and restaurants, and therefore we may see more people opting to socialise and drink wine at home in the coming months."
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