Virgin Wines impacted by ‘significant’ increases in labour and energy costs
Shares in the online wine retailer slipped after it reported that pre-tax profits declined to £3.2 million for the six months to December 31.
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Your support makes all the difference.Virgin Wines has said it is facing “significant increases” in the cost of packaging, labour, energy and shipping as it posted a dip in profits for the latest half-year.
Shares in the online wine retailer slipped after it reported that pre-tax profits declined to £3.2 million for the six months to December 31, compared with a £3.4 million profit a year earlier.
The group told shareholders that profitability was impacted by increased investment to secure new customers as well as soaring costs.
Virgin Wines said higher courier and glass costs were also placing pressures on the company, but it stressed it was mitigating these increases through efficiencies in its operations and beneficial currency rates.
Jay Wright, chief executive, said the second half of the financial year has “started well” despite an uncertain consumer backdrop.
This result demonstrates the strength of the underlying business model
It came after the firm said revenues of £40.6 million for the half-year to December 31 were in line with the same period a year earlier.
The group added that this was 55% higher than the same period before the pandemic struck.
Mr Wright added: “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.
“We continue to make progress with our strategic initiatives and remain in line with management expectations.”