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(Sharecast News) - Virgin Wines tumbled on Friday as it said full-year profit and revenue were set to miss analysts' expectations as it cited higher costs and weaker consumer confidence due to the Iran war.
In an update for the year to 3 July, the company said it now expects annual revenue of around 61m, an EBITDA loss of 200,000 and pre-tax losses of 1.5m. Market expectations were for revenue of 63.25m, EBITDA of 100,000 and a pre-tax loss of 1m.
Virgin Wines said the current macro environment, exacerbated further in recent months by the war in the Middle East, continues to exert pressure on consumer confidence and discretionary spend.
The company said that while it has worked hard to mitigate material increases in costs, particularly increased duty and Expected Producer Responsibility - a mechanism by which packaging producers fund the full cost of managing packaging waste - it has been difficult to eliminate these completely.
On a brighter note, Virgin also said on Friday that it has signed a lease for a new warehouse facility in Preston, which will provide "meaningful synergies, economies of scale and structural operational benefits from FY28 onwards". It will also remove transport costs between the current Preston and Bolton facilities.
Chief executive Jay Wright said: "Our execution against the key pillars of our growth strategy is delivering encouraging progress, despite that growth now being slightly slower than our original plan due to external market pressures. We are evidencing that the strategy is working, and we remain focused on taking further market share and continuing to invest in our growth channels.
"We have an exceptionally loyal customer base who appreciate the outstanding quality and value of our exclusive wine portfolio and the exceptional levels of customer service we consistently deliver. We look forward to pressing ahead with our growth strategy and delivering on our medium-term goals."
At 0920 BST, the shares were down 13.4% at 29p.
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