Virgin Wines UK PLC on Wednesday said the new strategic plan it promised at the beginning of the year will see its cash pile applied to growth investments and a share buyback.

However, the Norwich, England-based online wine retailer warned that the investments will hurt profit in the short-term.

Shares were down 8.6% to 44.80 pence on Wednesday morning in London, though they remain up 36% so far in 2025.

Virgin Wines reported pretax profit of £1.3 million in the six months that ended December 27, up 18% from £1.1 million a year before.

Revenue slipped by 0.6% to £34.1 million from £34.3 million, but operating expenses were reduced by 5.2% to £9.2 million from £9.7 million and finance income more than doubled to £372,000 from £161,000.

Virgin Wines declared no interim dividend, though said it will keep its dividend policy ‘under review’.

The company also said it intends to use its cash reserves to introduce a share buyback programme. Under the programme, Virgin Wines will buy back up to 15% of its current shares. It has a £25 million market capitalisation, so the buyback would be worth about £3.8 million.

The buyback is an outcome of a strategic review that Virgin Wines had promised back in January. As part of its new plans, the company also said it will invest for growth. It will aim to accelerate its rate of new customer acquisition and to build its commercial channel, within which it partners with retailers such as Ocado Group PLC, Moonpig Group PLC and WH Smith PLC.

Virgin Wines said it also will invest in technology to improve customer communications and build upon its launch of low-price offering Warehouse Wines.

Both the new investment and the share buyback will be funded from the company’s £23.7 million in gross cash, including £17.3 million in net cash and £6.4 million in customer deposits for its WineBank subscription service.

Virgin Wines warned that the additional investment will have a short-term impact on profitability. But it thinks the initiatives can take it to £100 million in annualised revenue within the next five years, against revenue of £59 million reported for financial 2024.

Trading in the second half of financial 2025 so far is in line with expectations, the company said, but ‘not without its challenges’, amid duty tax increases on wine and an increased ‘administrative burden’ as a result.

Earlier this month, Virgin Wines said Chief Financial Officer Graeme Weir will retire on Friday this week after 22 years with the company. He will be replaced by Amanda Cherry, currently head of Group Finance and herself 16 years with the company.

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