Virgin Wines targets £100m revenues through ‘turbocharging’ growth plan

Virgin Wines has unveiled plans to “turbocharge” its growth and deliver £100m in annual revenue over the next five years through a new growth strategy, whilst the group hailed a “resilient” performance in its H1 results.

The plan, which aims to deliver this revenue growth at a 7% EBITDA margin, will focus on four key areas: increasing customer acquisition; driving growth in commercial partnerships; using technology to enhance customer engagement; and investing in Warehouse Wines, which soft launched last year.  

The group said that since listing on AIM in March 2021, it has remained debt free, “consistently” cash generative and has grown its revenues by 45% since the start of FY20, “despite volatile and challenging trading conditions”.

According to the group, this was driven by strong commercial disciplines, a loyal and active customer base and the introduction of new initiatives and propositions to attract new customers. 

Alongside the newly-announced growth strategy Virgin Wines said it also intends to launch a share buyback programme enabling the group to purchase up to 15% of its existing share capital.

Jay Wright, CEO at Virgin Wines, said: “I am delighted to release our growth strategy and capital allocation plan, both of which underpin the next chapter of Virgin Wines’ growth. The underlying business is performing well, and we have a unique business model as well as a dedicated and highly experienced team. We look forward to executing this strategy to turbocharge Virgin Wines’ growth and deliver value for all of our stakeholders.”

News of the growth plan comes as the group reported a “resilient” first half of trading, with pre-tax profit up by 20% to £1.3m, up from £1.1m the prior year, as profitability was driven by operational efficiency.

Revenues remained broadly flat in the half-year ended 27 December at £34.1m, down from £34.3m the year before.

The group was particularly boosted by Christmas trading, with revenues up 6.7% in the six weeks to 27 December to £13.5m, with the December period up 9% year-on-year delivering record sales for a single month outside the Covid-affected period.

New customer acquisition was also up 29% in the half-year and by 25% during December 2024.

Elsewhere, cost per case fell by 10.1% during the period, and by 5.4% in December, despite the 10% increase in the National Living Wage and cost pressure on paper and energy affecting packaging and courier costs.

The recently launched Warehouse Wines also ended the period with 17,600 customers and has generated £1m of revenue in the half year to end Dec 2024, according to the group. 

Commenting on the results, Wright said: Our strategy of acquiring high quality customers at an industry-leading low cost per recruit, while maximising the quality and value of our wines through our unique open-source buying model, continues to position us well to navigate market headwinds.

“We have introduced a number of new strategic initiatives to diversify our offering and enable us to appeal to as many potential customers as possible. Our Warehouse Wines value proposition continues to deliver positive results, while our Vineyard Collection range and the premium Australian Five O’clock Somewhere Wine Club showcase the unquestioned expertise of our Buying Team alongside our network of winemakers around the world.”

He added: “We continue to work with a large range of partners to deliver increased numbers of new customers whilst strengthening our relationship with key commercial partners such as Moonpig and Ocado. Virgin Wines has a unique and differentiated low-cost business model, a loyal and active customer base and a highly experienced team that has consistently delivered industry leading results. We are confident that the Company will execute the new Growth Plan announced today and deliver increased value for shareholders.”