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Virgin Wines UK has hailed a “good” Christmas and revealed a “significant” improvement in profitability during its first half.
The DTC online wine retailer did not highlight figures for its festive performance in this morning’s trading update, but the group said revenues increased 2% year on year to £34.3m in the six months to 29 December.
Virgin added the rise was achieved despite a subdued consumer economic landscape.
Group EBITDA increased by 122% to £1.8m in the half, helped by revenue growth and “stringent” cost management.
Virgin said it remained confident of the group’s prospects in delivering a positive 2024 performance in line with current market expectations.
CEO Jay Wright said he was “pleased” with the first-half performance, particularly the strong profitability.
“Following operational challenges last year, we made significant improvements in our warehouse operations, achieving a planned reduction in fulfillment costs, while maintaining an excellent next day delivery service throughout the busy peak trading period.
“Whilst new customer acquisition remains challenging, we have maintained our disciplined approach, and our new Warehouse Wines value offering which launched in late October has had an encouraging initial response. We go into the second half encouraged by our performance and in line with the key drivers behind our business model, whilst remaining mindful of the challenging consumer landscape.”
Shares in the group climbed 2.4% higher to 38.9p this morning.
Morning update
Catering giant Compass has agreed a £475m deal to acquire hospitality firm CH&CO.
The group generates annual revenues of £450m and provides services to premium venues such as Kew Gardens, the Royal Opera House, Royal Academy of Arts, the Southbank Centre and the Historic Royal Palaces.
Compass CEO Dominic Blakemore said the deal combined the best of the two companies.
“With CH&CO’s strong brand identity and a broad geographic reach, we would be able to further enhance our customer proposition, helping us capitalise on the significant growth potential in the market,” he added.
CH&CO CEO Bill Toner said: “Both businesses have strong and complementary brands, and subject to regulatory approval, there is a great opportunity for us to learn from each other and to build an even more exciting future together.”
The FTSE 100 is up 0.3% to 7,483.86pts so far today.
Compass opened down 0.4% to 2,162p after revealing the acquisition of CH&CO.
Elsewhere, early risers alongside Virgin Wines include Hilton Food Group, up 4.2% to 816p, Ocado, up 3.4% to 570.6p, and Just Eat Takeaway, up 2.9% to 1,205.4p.
Naked Wines is down 1.9% to 57.9p, PayPoint has fallen 1.4% to 509p and AG Barr is down 0.6% to 535p.
This week in the City
Christmas trading updates continue this week as Primark owner Associated British Foods puts out a Q2 statement tomorrow, while Bisto and Mr Kipling owner Premier Foods issues an update for Q3 for the 13 weeks ended 30 December.
In the US, P&G publishes quarterly results tomorrow afternoon.
Thursday brings a full-year pre-close trading update from Fever-Tree and a Q1 statement from rival drinks group Britvic.
WH Smith closes out the week with a trading update on Friday, which also sees the latest consumer confidence index from GfK.
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