Virgin Wines has posted a return to profits despite the "challenging" backdrop.
The company, listed on the London Stock Exchange, declared a pre-tax profit of £1.95m for the 12 months ending June 30, 2024, turning around from a loss of £430,000 in the corresponding period last year.
Impressively, the firm's wine subscription service has helped mitigate higher operating costs.
Despite an "inflationary environment and ongoing cost pressures", Virgin Wines notched up an increase in gross margins - from 29.6 per cent in the previous 12 months to 31.9 per cent.
Revenue for the wine merchant held steady with the previous financial year at £59m, as enhanced margins and "operational efficiencies", notably in warehouse fulfilment, paved the way to profitability, as reported by .
Significantly, new customer conversion rates for the group's subscription schemes rose to 55.5 per cent from 49.2 per cent in the preceding year.
The attrition rate for its flagship Winebank membership service saw an improvement, dropping to 16.1 per cent from 17.3 per cent in the year before.
Jay Wright, CEO of Norwich-based Virgin Wines, made the following remarks upon announcing the results: "I am pleased to report a full-year performance with resilient sales despite a challenging consumer and inflationary market backdrop."
Meanwhile, Wright commented on industry recognition for the company's services stating: "Demand remains strong for our range of wines and subscription schemes. Our flagship WineBank service was recently recognised as 'Wine Club of the Year' at the prestigious International Wine Challenge awards, and over the past 12 months we have seen it deliver increased new customer conversion rates and decreased cancellation rates."
"Our B2B sales continue to grow while our newly launched value proposition, Warehouse Wines, has also delivered encouraging initial results."
"We enter FY25 with the business performing well, and we remain confident for the future due to the strength of the underlying business model, our disciplined cost control and unique sourcing model."
Panmure Liberum analysts praised the development. According to the analysts, "A disciplined approach pays off with a beat to earnings before interest, tax, depreciation and amortisation (EBITDA) and profits."
"KPI's are improving and provide confidence the core business remains in rude health. New initiatives such as Warehouse Wines are building up well."
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