Virgin Wines profits beat expectations

(Sharecast News) - Virgin Wines reported a drop in full-year pre-tax profit on Thursday but results were ahead of expectations, sending shares in the online wine retailer surging.

In an update for the year to the end of June, Virgin said earnings before interest, tax, depreciation and amortisation fell to �2.3m from �2.8m in the same period a year earlier, while pre-tax profit declined to �1.6m from �1.9m. Both were ahead of market expectations, however, by over 4.5% and 23.1% respectively.

Virgin Wines said EBITDA and pre-tax profit were down as expected due to investment in the group's growth strategy, which was announced in March. Revenue was steady at �59m.

The company said that Warehouse Wines, its newly-launched value proposition, delivered �1.8m of revenue in its first full year of trading.

Chief executive Jay Wright said: "As we celebrate our 25th anniversary this year, I am delighted to report excellent progress across all our key growth drivers. Both EBITDA and PBT were ahead of market expectations, and we have seen impressive growth in both our commercial channel and our value proposition, Warehouse Wines, two key elements of the growth strategy which we set out in March.

"We have continued to drive increased levels of loyalty from customers on our key WineBank subscription scheme, whilst our marketing and operational costs have both reduced substantially year-on-year despite the inflationary environment. In a highly competitive sector, we have been delighted to see healthy market share gains with customers continuing to rate highly our exclusive portfolio of wines, and our outstanding levels of service."

At 1040 BST, the shares were up 9% at 63.80p.