Virgin Wines has beaten profit expectations as it progressed ambitious strategic goals amid a market slowdown.
While pre-tax profits fell 16% to £1.6m in the year to 30 June, this was due to rising regulatory costs and investment in a new growth strategy announced in March, the company said.
It was still ahead of expectations as Virgin mitigated much of these costs through savings on marketing of 13% and a decrease in operating costs of 6%.
In March, Virgin Wines said it would put £20m into “turbocharging” growth as it targets £100m in annual revenues by 2030.
Sales were flat at £59m, and below expectations, which the company attributed to a “subdued consumer environment”. Across the whole market, online sales of wine, beer and spirits fell 9.7% from July 2024 to June 2025, according to IMRG.
Amid weaker demand, Virgin has looked to diversify its revenues, with commercial sales up 24% last year thanks to new partnerships with Ocado and Moonpig, and the newly launched Warehouse Wines growing to £1.8m.
Customer acquisition also rose 28%, with acquisition costs climbing just 6%.
CEO Jay Wright said: “We have continued to drive increased levels of loyalty from customers on our key WineBank subscription scheme, while our marketing and operational costs have both reduced substantially year-on-year despite the inflationary environment.”
The company’s share price rose 9% following the results, with investors increasingly confident in its direction.
“This strategic momentum lays a foundation for revenue growth in FY26 and beyond… potentially giving the scale it currently lacks,” said Panmure Liberum analyst Wayne Brown.
Brown suggested that while Virgin Wines’ targets were stretching, if it can successfully return to the revenue growth flywheel, profitability should follow.
He cautioned, however: “The quality of newly acquired customers will be crucial to achieving these goals, which remains unproven.”
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