Virgin Wines earnings slip in H1 

Virgin Wines has seen its EBITDA fall to £3.7m in the half-year ended 31 December 2021, down from £4.5m the previous year, as it grappled with changing consumer habits and rising costs across the business. 

The group’s profit also slipped slightly in the period, falling from £3.4m in H1 2021 to £3.2m in H1 2022, though total revenue was £40.6m, in line with the six months ended 31 December 2020. 

It comes as the group dealt with a “significantly more challenging” trading period, as well as a “rapid and continuous” change in consumer behaviour. 

It said that business was impacted by widespread cost pressures that were “evident” with significant increases in the cost of packaging, labour, energy, shipping, glass and courier charges, which all added pressure to the cost base. 

Subscription-based revenue rose by 23% to £26.3m, however, while subscription memberships increased by 7% to 158k. Its active customer base grew to 185k, up by 9% since H1 2021, though this was described as a “modest” rise due to decreased levels of organic walk-up traffic and a lapse of PAYG customers.

It added that customer acquisition was the most challenging area of the business in the period. It cited “aggressive” competitor pricing coupled with wider promotional schemes made throughout the sector to potential customers over the Christmas trading period as factors that led to decreased traffic to its website from acquisition activity. 

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. 

“This result demonstrates the strength of the underlying business model, our discipline in acquiring good quality customers, the reliability of future subscription revenues from a highly engaged customer base and the ability to generate free cashflow as well as our award-winning consumer propositions, the quality of our wines and our outstanding customer service.”

He added that the second half of the year has “started well” for the group, and that it continues to make progress with its strategic initiatives and remains in line with management expectations.