Virgin Wines has slipped into the red as the online wine retailer invested in growing its customer base.
Pre-tax losses totalled £400k in the six months to 2 January, compared with a profit of £1.3m in the same period last year, while EBITDA declined from £1.6m to £200k year on year.
It followed an additional £900k investment in customer acquisition and marketing to drive growth. Virgin Wines said. Despite a highly inflationary environment and significant cost pressures, it manged to keep a tight control of costs, it added.
Revenues increased 2% in the half to £34.7m as the group made market share gains and outperformed the wider online drinks market, which declined by 11% during the period. Virgin highlighted strong trading over the peak Christmas period, with sales up 5% in the seven weeks to 26 December.
It also delivered “unprecedented” year-on-year gains in customer acquisition in the half, with a 40% increase recorded and 75k new customers.
Virgin added that trading had continued positively in January and February, with sales up 12% year on year and the group on track to meet full-year expectations. Meanwhile, customers acquired are tracking above forecasts for the second half, with January up 54% and February by 83%.
Its discount Warehouse Wines concept is also recording substantial year-on-year revenue gains, increasing 105% over the first two months of 2026.
Despite inflationary pressures, rising duties, new regulatory costs and the ongoing challenging consumer environment, Virgin said it was executing on its growth strategy and delivering solid year-on-year growth and vastly outperforming the market.
It warned the volatile macro-economic backdrop and continued pressure on consumer spending, alongside increased transport and energy costs, made for uncertain trading over the coming months.
However, it planned to continue to invest behind its growth strategy, particularly in further customer acquisition, with £600k earmarked for the current financial year.
Virgin expected to remain profitable at an underlying EBITDA level and was confident the future benefits from this additional investment would outweigh the short-term financial impact.
“We are delighted to see that the investment in our growth strategy is working,” said CEO Jay Wright. “We have delivered a 40% increase in new customers acquired, continued to grow our commercial partnerships, achieved 92% year-on-year growth in our Warehouse Wines value proposition and completed the initial phase of our mobile app development.
“We have entered the second half of the year with strong momentum, keeping our foot firmly on the customer acquisition accelerator, with recruitment up 54% year on year in January and 83% year on year in February. With a strong, debt-free balance sheet and our growth strategy gaining momentum, we will continue to invest in our ambitious plans and remain confident in delivering sustained success.”
No comments yet