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Virgin Wines expects FY23 sales to be “slightly” lower than market expectations at around £60m, with the group’s underlying profit before tax to be in the region of £0.5m and £1m.
This comes as the wine retailer experienced operational issues with its software, which affected the implementation of the new Warehouse Management System (WMS).
This had negatively impacted its first half revenue and profit last year, however, the board is now “confident that these one-off issues are in the past”.
As a result, the board expects double digit sales growth in FY24, alongside an EBITDA margin of between 4% and 5%, as inflationary pressures on freight and glass ease.
The group’s working capital position continues to be strengthened with a 10% reduction in stock holding, totalling £1.2m since its January high point.
Meanwhile the group also maintains a strong cash position with £12.3m gross cash as of 28 April and no debt.
Jay Wright, CEO of Virgin Wines, said: “As previously reported, this financial year has seen an unprecedented range of external and internal challenges impact the business. We anticipated that trading would take some time to settle following our substantial growth during the Covid period, but we are proud to have built a business that is circa 50% larger in revenue terms than it was moving into FY20.
“We have a number of exciting new initiatives in the pipeline aimed at delivering incremental growth, and our fundamental customer proposition and business model remains strong. We are in a good position to benefit from ongoing improvements in the macroeconomic environment, and are optimistic as we look to FY24 and FY25.”
