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(Sharecast News) - Virgin Wines UK said it was targeting annual revenues of £100m on Wednesday, as it outlined plans to "turbocharge" the business.
The direct-to-consumer online wine retailer said it wanted annual revenues to reach "at least" £100m over the next five years, nearly double current levels. It will also target an earnings before interest, tax, depreciation and amortisation margin of 7%.
The firm said the growth strategy was based on four specific goals, including boosting customer numbers, securing new commercial partnerships, investing in the Warehouse Wines division and using technology to improve customer engagement.
Jay Wright, chief executive, said: "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 our stakeholders."
The update came as the AIM-listed business posted results for the six months to 27 December. Total revenues were broadly flat, at £34.1m, but pre-tax profits jumped 20% to £1.3m after it reduced costs.
Customer acquisition rose 29% year-on-year, while the customer retention rate improved to 84% from 81%.
The company benefited from an especially strong Christmas, with revenue growth of 9% in December helping offset a weaker start to the period.
Looking to the second half, Virgin Wines acknowledged that the current trading environment was "not without its challenges", including a rise in the duty paid on a bottle of wine and the incoming extended producer responsibility tax (EPR), which it said would add around £900,000 of costs per annum.
It continued: "EPR is a policy that requires businesses to pay for the environmental impact of their products and packing.
"It is therefore vital that the business continues to scale to drive cost efficiencies, increased productivity and economies of scale. We are confident our new five year growth strategy will deliver such improvements."
As at 0930 GMT, shares in Virgin Wines were down 5% at 46.44p.
