Virgin Wines battles shifting consumer habits as share earnings slip
Virgin Wines earnings per share and pre-tax profit have stunted in the past six months, as the online wine retailer battles shifting consumer habits.
With spiralling inflation and soaring energy prices, UK consumers are increasingly holding back splurging on non-necessities such as wine.
The company, a subsidiary of the Virgin Group, earned an average of 4.6p per share in the six months to 31 December, a short fall from the 6p it pulled in in the first half of the year.
Profit before tax also shrunk slightly from £3.4m in the first six months of the year, to £3.2m by the year’s end.
The wine retailer, however, has snagged a new partnership with online card maker Moonpig which is expected to strengthen revenue.
Subscription based revenue grew 23 per cent to £26.3m, from the £21.4m in secured six months prior – signalling that the company’s customers are not yet being deterred by climbing prices elsewhere.
Overall revenue was in line with late 2020 expectations, Virgin Wines said in its latest financial update, as it snagged £40.6m for the period.
“As expected, the trading environment has evolved considerably over recent months, and given strong prior year comparatives, we have worked hard to maintain encouraging growth from our core sales channels, whilst maintaining strict discipline around our customer acquisition and our cost control,” CEO Jay Wright said in a statement.
“The second half of the year has started well. We continue to make progress with our strategic initiatives and remain in line with management expectations.”