LONDON (ShareCast) - (Sharecast News) - Virgin Wines UK reported annual results broadly in line with last year on Wednesday, with profitability coming in ahead of forecasts despite a contracting online drinks market and persistent inflationary pressures.
Revenue for the year ended 28 June was steady at £59m, matching the prior year, while adjusted EBITDA came in at £2.3m, above consensus expectations of £2.2m.

Profit before tax was £1.6m, compared with £1.7m a year earlier.

Gross margins eased to 35.6% from 37.6% as the company absorbed higher alcohol duties, packaging costs, and the introduction of a new sustainability tax.

The balance sheet remained robust, with net cash of £9.3m and no debt at the year-end.

Gross cash stood at £17.6m, reflecting £2m spent on share buybacks and £1.6m of duty prepayments.

Virgin Wines said the business remained cash generative and well positioned to continue investing in organic growth.

"2025 was a milestone year for Virgin Wines, being both our 25th anniversary but also the year in which we announced our medium-term growth strategy, a step-change for the business as we significantly increase our investments in organic growth opportunities," said chief executive Jay Wright.

"During the year, we delivered a resilient performance, with revenue in-line with the prior year against a market that contracted and with profits being ahead of expectations, despite a challenging consumer backdrop and significant cost pressures."

Customer acquisition rose 28% year-on-year with only a 6% increase in marketing spend, while conversion rates remained above 40%.

The AIM-traded company said its disciplined approach ensured a five-year payback of more than 4.5 times per customer.

Its commercial partnerships channel grew revenue by 24%, driven by expanded collaborations with Moonpig and Ocado, as well as new travel partnerships with LNER, Avanti, GWR and WHSmith.

Warehouse Wines, the company's new value-focused brand, generated £1.8m in revenue in its first full year of trading, representing growth of 484%.

Virgin Wines said it saw the platform as an important route to reaching new customer segments using its existing infrastructure.

Operationally, the business achieved a 3% reduction in pick-and-pack costs per case through its warehouse management system and a 17% saving in customer service costs.

Development of a mobile app remains on track for launch in the second half of 2026, while the company continues to explore how AI can enhance efficiency and service quality.

Trading in the current financial year remained in line with expectations, with first-quarter results showing a 29% rise in customer acquisition and strong growth across commercial and Warehouse Wines channels.

"Looking ahead, having launched our new growth strategy, we remain confident we are well-positioned to deliver against our medium-term targets," Wright added.

"With a resilient and loyal customer base, a growing range of appealing propositions, and exciting initiatives such as the launch of our mobile app, we remain confident in meeting market expectations for 2026."

At 0808 BST, shares in Virgin Wines UK were up 2.46% at 50p.

Reporting by Josh White for Sharecast.com.

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