Virgin Wines FY profit to miss expectations, shares slide

Virgin Wines posted a jump in first-half revenue on Thursday but warned that revenue and profit for the year would be below expectations due to the uncertain trading and macro environment and increased cost pressures.

In the six months to the end of December, revenue rose 55% to £40.5m, with core channels sales up 6.2% to £29.6m. The online wine retailer said it had continued to deliver "excellent" growth across its subscription schemes, with customers on its flagship WineBank service performing ahead of expectations, delivering a 28% increase in revenue.

However, it also flagged a number of operational challenges during the period, such as labour market shortages caused by the emergence of the Omicron Covid variant, staff absences due to illness/self-isolation, freight disruption and inflationary pressures.

As a result, it now expects revenue and profit for the year ending June 2022 to be "slightly below" consensus market estimates.

Chief executive officer Jay Wright 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 performance continues to reflect the strength of our award-winning consumer propositions, the ongoing loyalty of our existing customers, the quality of our wines and our growing reputation for outstanding customer service. We are also pleased to report that the customers acquired during the Covid lockdown period continue to perform strongly."

At 0810 GMT, the shares were down 18% at 164p.