Virgin Wines UK PLC on Thursday said revenue in the first half of its financial year was down as ‘one-off factors’ impacted sales.

Virgin Wines shares were down 27% trading at 53.00 pence per share on Thursday morning in London.

The Norwich, England-based online wine retailer said revenue in the six months ended December 31 was £33.7 million, down 17% from £40.5 million for the same period last year.

The company said the fall came despite ‘strong rates of customer acquisition in the face of high inflation and cost-of-living pressures, sales were impacted by some one-off factors, particularly over the Christmas trading period.’

Virgin Wines said sales in the Christmas period were hurt by postal strikes and bad weather, with multiple couriers bringing forward delivery cut-off dates and reducing trailer capacity, meaning that the company was forced to cut off Christmas orders a week earlier than expected to guarantee delivery. The company estimated lost revenue to be about £1.5 million.

The company also noted that September sales were affected by the death of Queen Elizabeth II, as marketing activity was paused during the period of mourning. This led to an estimated sales loss of around £1.7 million.

Virgin Wines said it had attracted a significant number of new customers during the first half of financial 2023, with 60,000 new customers during the period, an increase of 4% from a year ago.

The WineBank subscription scheme ‘continues to drive new customer acquisitions,’ with 42,000 new customers acquired, up by 21% from the year before. However, the company noted that the average spend per subscription customer for the first half dropped to £231 from £258.

Virgin Wines said full year revenue and profit will be hurt by the problems the company faced in the first half, with revenue of £63 million expected in the year ending June 30, down 9.0% from £69.2 million in financial 2022.

Virgin Wines said it expects underlying earnings before interest, tax, depreciation and amortisation margin to be 4% to 5%, or 6% to 7% excluding exceptional factors.

Chief Executive Officer Jay Wright said: ‘We are disappointed with our profitability performance over what has been a difficult trading period, which has been exacerbated by one-off exceptional circumstances. However, our underlying business model remains resilient as the consumer proposition continues to resonate strongly.’

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