LONDON (ShareCast) - (Sharecast News) - AIM-listed Virgin Wines said on Thursday that full-year EBITDA and pre-tax profit were ahead of market expectations despite a challenging backdrop.

In an update for the year to 30 June, the online wine retailer said revenue was in line with the previous year at £59m, while earnings before interest, tax, depreciation and amortisation were up 260% at £2.8m. Enhanced margins and operational efficiencies, particularly in warehouse fulfilment, drove an improvement in profitability, it said.

Gross margins improved to 31.9% from 29.6% a year earlier despite an inflationary environment and ongoing cost pressures, driven by its "unique sourcing model and strong cost control", it said.

Meanwhile, new customer conversion rates on the subscription schemes increased to 55.5% from 49.2%. Cancellation rates on the flagship WineBank membership service improved to 16.1% from 17.3%.

Chief executive Jay Wright said: "I am pleased to report a full-year performance with resilient sales despite a challenging consumer and inflationary market backdrop. Both EBITDA and PBT were ahead of expectations, being significantly up year-on-year due to expanded gross margins and reduced operating variables.

"Demand remains strong for our range of wines and subscription schemes. Our flagship WineBank service was recently recognised as 'Wine Club of the Year' at the prestigious International Wine Challenge awards, and over the past 12 months we have seen it deliver increased new customer conversion rates and decreased cancellation rates.

"Our B2B sales continue to grow while our newly launched value proposition, Warehouse Wines, has also delivered encouraging initial results."

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