26 March 2025
Virgin Wines UK plc
("Virgin Wines", the "Company" or the "Group")
Interim Results
Resilient first-half performance underpinned by 9% growth over the important Christmas trading period and launch of a 5-year strategic Growth Plan to drive future shareholder value
Virgin Wines UK plc (AIM: VINO), one of the UK's largest direct-to-consumer online wine retailers, is pleased to announce its unaudited interim results for the six months ended 27 December 2024 (the "Period").
Financial highlights
| · | Total revenue of £34.1 million1 (H1 2024: £34.3m)
|
| · | Strong profitability driven by operational efficiency, with PBT up 20% to £1.3m (H1 2024: £1.1m) while EBITDA remained in line at £1.6m
|
| · | Strong balance sheet, with no debt, £23.7m of gross cash and net cash2 of £17.3m, an increase of 57% year-on-year (H1 2024: £11.0m) |
Strategic highlights
| · | Strong Christmas trading performance | |
|
| o | Revenue up 6.7% in the six weeks to 27 December 2024 to £13.5m with the December period up 9% year-on-year delivering record sales for a single month outside the covid affected period
|
| · | Active and loyal customer base, with a continued focus on high-quality customer acquisition | |
|
| o | Leveraging the underlying strengths of the operating model and a continued focus on strategic marketing and promotional activity to drive loyalty and growth |
|
| o | New customer acquisition for the Group up 29% in the Period and by 25% during December 2024 |
|
| o | 12-month rolling cancellation rate of WineBank, the Group's main subscription offering, at an all-time low of 14.9%
|
| · | Operational efficiencies reinforce position as the lowest cost to serve | |
|
| o | Cost per case reduced by 10.1% during the Period, and by 5.4% in December, despite the 10% increase in the National Living Wage and cost pressure on paper and energy affecting packaging and courier costs |
|
| o | Warehouse Management System (WMS) continues to drive further efficiency benefits, with the Company's award-winning Customer Service team rated 'Excellent' on Trustpilot
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| · | New Warehouse Wines brand proposition delivered encouraging growth | |
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| o | Warehouse Wines ended the Period with 17,600 customers and has generated £1 million of revenue in the half year to end Dec 2024 |
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| o | The Company is encouraged with the progress made and has invested in its customer acquisition and marketing while leveraging the core operational infrastructure of the Group
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| · | Continued high growth in the Commercial channel | |
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| o | Year-on-year revenue up 17% during the Period, and 32% in December |
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| o | The Company is expanding its partnership with Moonpig3 following an agreement for Virgin Wines to manage the growth of their alcohol category |
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| o | Strategic partnership with Ocado launched in October delivering positive early results, with further partnership opportunities in the pipeline |
Strategic Growth Plan and Capital Allocation Policy
| · | As stated separately this morning, Virgin Wines has announced a strategic growth plan focusing on four key areas: customer acquisition, commercial partnerships, Warehouse Wines and the development of a mobile app, projecting revenues to increase to £100 million over the duration of the plan. The announcement also sets out the Group's capital allocation policy
|
Current trading and outlook
| · | Second half trading has started positively, and our product offering continues to resonate with our customer base
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| · | The acceleration in new customer acquisitions seen in H1 2025, coupled with the resilience of trading, our position on being the lowest cost to serve direct-to-consumer online wine retailer and the strength of the Group's balance sheet provides the Board with confidence to implement an ambitious 5-year Strategic Growth Plan.
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| · | Post-period end, the Company was pleased to announce the appointment of Amanda Cherry to the Board as Chief Financial Officer in a planned transition as Graeme Weir enjoys a well-earned retirement. Amanda will work alongside Jay Wright and the executive team to deliver the next phase of growth
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| (1) | Continued to increase market share and outperformed the online drinks market |
| (2) | Net cash of £17.3m is total cash of £23.7m less Wine Bank customer deposits of £6.4m. The business remains debt free with customer deposits held in a separate ring-fenced account |
| (3) | Both teams continue to work closely, with new developments expected to be announced in due course |
Jay Wright, Chief Executive Officer at Virgin Wines, commented:
"I am pleased to report a positive first-half performance, with the business delivering encouraging results, particularly during the peak Christmas trading season.
Our strategy of acquiring high quality customers at an industry-leading low cost per recruit, while maximising the quality and value of our wines through our unique open-source buying model, continues to position us well to navigate market headwinds.
We have introduced a number of new strategic initiatives to diversify our offering and enable us to appeal to as many potential customers as possible. Our Warehouse Wines value proposition continues to deliver positive results, while our Vineyard Collection range and the premium Australian Five O'clock Somewhere Wine Club showcase the unquestioned expertise of our Buying Team alongside our network of winemakers around the world.
We continue to work with a large range of partners to deliver increased numbers of new customers whilst strengthening our relationship with key commercial partners such as Moonpig and Ocado
Today we also announced our Growth Plan and Capital Allocation Plan. This is an ambitious and transformational change in our business strategy and investment case, which we are excited to implement over the coming years.
Virgin Wines has a unique and differentiated low-cost business model, a loyal and active customer base and a highly experienced team that has consistently delivered industry leading results. We are confident that the Company will execute the new Growth Plan announced today and deliver increased value for shareholders."
Enquiries:
| Virgin Wines UK plc Jay Wright, CEO Graeme Weir, CFO
| Via Hudson Sandler |
| Cavendish (Nominated Adviser and Sole Broker) Matt Goode Carl Holmes Seamus Fricker Elysia Bough
| Tel: +44 (0) 20 7908 6000
|
| Hudson Sandler (Public Relations) Dan de Belder Harry Griffiths Eloise Fleet
| Tel: +44 20 7796 4133
|
Notes to editors:
About Virgin Wines
Virgin Wines is one of the UK's largest direct-to-consumer online wine retailers. It is an award-winning business which has a reputation for supplying and curating high quality products, excellent levels of customer service and innovative ways of retailing.
The Company was established in 2000 by the Virgin Group and was subsequently acquired by Direct Wines in 2005 before being bought out by the Virgin Wines management team, led by CEO Jay Wright and CFO Graeme Weir, in 2013. It listed on the London Stock Exchange's Alternative Investment Market (AIM) in 2021.
Virgin Wines is headquartered in Norwich, with two fully bonded, national distribution centres in Preston and Bolton. It stocks over 650 wines sourced from more than 40 trusted winemaking partners and suppliers around the world which it sells to a large active customer base, the majority of whom are on one of the Group's subscription schemes.
The Company drives the majority of its revenue though its fast-growing WineBank service, that has over 137k members, using a variety of marketing channels, as well as through its 30 strong Wine Advisor team, its Wine Plan channel and its Pay As You Go service.
Along with its extensive range of award-winning products, Virgin Wines was delighted that its flagship WineBank service was awarded 'Wine Club of the Year' at the 2024 IWC Awards, was named Online Drinks Retailer of the Year for 2022 at the Drinks Retailing Awards, as well as receiving the bronze award for Contact Centre of the Year at the 2022 UK National Contact Centre Awards. In addition, in 2023 the Group's Head of Buying, Sophie Lord, was named Buyer of the Year by Decanter magazine.
https://www.virginwinesplc.co.uk
Chief Executive Officer's Statement
Business overview
Overall, we are pleased with our performance during the first half of the financial year on the back of an excellent and highly encouraging Christmas trading period with many notable highlights. The creditable performance was underpinned by a number of strategic initiatives to grow the customer base and optimise customer acquisition, as well as strategic marketing and focused promotional activity. This resulted in a 25% year-on-year increase in new recruits during December.
This has laid the foundation and acted as a test period for our next phase of investment and growth.
In conjunction with these results, we have also today released details of a new 5-year Growth Strategy and Capital Allocation Plan devised with the objective of propelling annualised revenue to at least £100m at the end of that period and with a commensurate improvement in profitability. Further details can be found in a separate RNS announcement released this morning.
Trading Overview
I am pleased to report that we have delivered a positive H1 2025 performance in spite of a challenging market environment, which included a particularly strong Christmas trading period. As a critical time of year for the Group, this is naturally very pleasing and demonstrates that our product offering clearly resonates with our customers. Revenue during December was up 9% year-on-year, achieving the highest sales period ever for the business outside the Covid affected years. During the 6 weeks to 27th December, revenue increased by 6.7% year-on-year.
The lower customer base at the start of the year led to an expected fall in year-on-year revenue during Q1 2025. However, the positive Christmas trading period led to revenue being broadly in line with the same period last year at £34.1m during the first half (H1 2024 £34.3m). This represents a significant outperformance against the UK online drinks market that has seen revenue decline by 5% over the past year*.
Despite a highly inflationary environment and significant cost pressures, EBITDA remained stable at £1.6m, whilst PBT rose 20% year-on-year to £1.3m, supported by the additional interest generated from our healthy cash position.
Our constant drive to be the lowest cost to serve in the sector continued to deliver a significant out-turn, and I am therefore delighted to report a 10.1% reduction in operating variable costs compared to H1 2024. Increases in both productivity and efficiency ensured all five elements that make up our operating variable cost line reduced. This is despite a substantial increase in the National Living Wage that affected costs within both our warehouse and customer service teams, alongside the continued inflationary pressure we are incurring on energy and paper.
We saw positive trends in several areas, including a 29% increase year-on-year in new customers acquired across the business in H1, enhanced loyalty from our 137k strong WineBank members and continued growth in our Commercial business.
Our recently launched Warehouse Wines value proposition also performed encouragingly, delivering £1m of revenue in H1 2025, and the continued implementation of our brand refresh has contributed up to a 50% increase in the conversion rate of our customer acquisition journey.
The business continues to be cash generative and debt free, with net cash at the period end of £17.3m, as well as a further £6.4m of customer WineBank deposits which are held in a separate ring-fenced account. This strong cash position, coupled with encouraging developments in several key trading areas, gives the business the confidence to invest more aggressively in growth.
Today, alongside our Interim Results, we are delighted to release our 5 Year Growth Strategy and Capital Allocation Plan. The Board and management team are greatly enthused by this strategy and we are confident it will deliver meaningful shareholder returns over the medium term.
*Source: IMRG Online Retail Sales Tracker December '24
Customer Acquisition
Expanding the number of new customers acquired across the Group has been a key priority and we were pleased that, by developing an increased number of propositions, introducing new offer mechanics, alongside better on-site conversion, we were able to deliver a 29% increase in new customers acquired year-on-year.
Despite this significant increase, the cost per recruit decreased modestly to £14.92 (£15.75 H1 2024) with the total marketing spend invested increasing by 23% year-on-year against a 29% increase in recruits. We maintain a disciplined model to customer recruitment, which positions us well to deliver profitable growth over the next five years.
Continuing to drive higher numbers of new customers remains a key strategic imperative and is an area where we are planning to be more ambitious while continuing to prioritise return on investment and lifetime value.
Strong retention from a loyal customer base
WineBank membership increased to 137k, up 2% year on year. This is a result of both the positive customer acquisition activity and the loyalty of existing members. The 12-month rolling cancellation rate hit an all-time low of just 14.9%, down from 16.8% the previous year and 17.8% in Dec '22.
Our customer retention rate, which measures the amount of revenue from customers that purchased the previous year, has improved to 84% from 81% last year and our sales retention rate stands at 90%, a testament to the ongoing loyalty of our customers and the value they receive from our award-winning customer service and exclusive portfolio of wines.
We continue to utilise a selection of sales channels to interact with our customers with revenue generated through email, SMS, web and our 30 Wine Advisors all being strong contributors.
Our customers continue to rate our wines highly, with the full portfolio averaging 4.2 out of 5 and our Trustpilot rating has increased to 4.5 out of 5 over the past year with our business rated 'Excellent' from over 24k reviews.
Our loyal customer base positions us well to mitigate market pressures and we look forward to building on this strong foundation as we execute our new Growth Strategy.
Growing our Commercial channel
Our Commercial business continues to go from strength to strength, delivering 17% year-on-year growth, and offers exciting growth prospects for the future. We are delighted to have secured an exciting partnership with Ocado where an initial selection of 55 different wines are available to purchase by the bottle. 17k bottles were sold through the partnership over Q2 2025, with both parties being encouraged by the initial results and looking forward to developing the partnership further.
Similarly, our relationship with Moonpig continues to deepen, with both parties having recently agreed for Virgin Wines to manage the full alcohol category within Moonpig, which should lead to a significantly increased range, and volume of sales, through our joint efforts.
With a number of further opportunities in the pipeline, a first class corporate sales team in place, sales through corporate gifting remaining strong over the Christmas period and our existing train supply partnerships renewed, we see the development of our Commercial channel as a major growth driver, as set out in our separate Growth Strategy announcement today.
Warehouse Wines
We continue to be encouraged by the early growth of our value proposition, Warehouse Wines. The brand is designed to target the supermarket buyer who is looking for everyday low prices, without a subscription scheme, delivery to their door and providing the superior value a wine specialist can bring. With 25 years' experience in sourcing and blending outstanding wines from across the globe, we can deliver quality/value ratios that far exceed those available from mass branded products. With sales of £1m in H1 2025 and entirely positive customer feedback, we are on course to reach our first-year objectives and see substantial opportunities for future growth to deliver circa 10% of Group revenue.
Current trading and Outlook
The business has traded in line with market expectations, which included the strong trading performance in Q2 and particularly the key peak trading period over Christmas. We trialled a number of exciting initiatives during the Christmas period, which gives us confidence in future initiatives and investment, and we look forward to implementing these on a permanent basis.
In March, we were delighted to be named Online Wine Retailer of the Year at the 2025 People's Choice Wine Awards. The award is unique in the sector as it's voted for by wine consumers rather than industry judges and is therefore further evidence that Virgin Wines is connecting with, and delighting, wine enthusiasts across the UK.
The Board has taken the opportunity over recent months to review the short to medium term strategic direction of the business and has concluded that, in order to deliver future shareholder value, the Group's strong cash reserves should be used to accelerate the growth of the business by investing in a number of key growth drivers. Furthermore, funds will be used to generate shareholder returns via the introduction of a share buyback programme as approved by shareholders at the recent General Meeting. The investment to drive top line revenue growth is necessary to enable the future success of the Group. The additional investment being made will naturally have a short-term impact on profitability, however, given the strength of the balance sheet, alongside the operational and cost discipline demonstrated over many years, the Board has confidence to pursue this strategy and the next phase of growth.
The current trading environment is not without its challenges. In February, the Group saw the most significant adjustment to the duty regime ever, which has increased the tax paid on a bottle of wine by up to 54p depending on the alcohol by volume of the product. In addition, the administrative burden on managing duty has also significantly increased. However, we are mitigating the impact of this, partly through pricing but also in the short term by pre-paying the duty on as much stock as possible prior to the adjustment, again demonstrating the benefits of a strong balance sheet.
The sector is also set to be subjected to the new Extended Producer Responsibility (EPR) tax which we believe will add around £900k per annum of additional year-on-year costs alone. This would equate to a minimum of another 10p to the cost price of each bottle if added to the cost of sales. EPR is a policy that requires businesses to pay for the environmental impact of their products and packaging. This includes the cost of recycling, collecting, and disposing of packaging. EPR is intended to reduce the amount of packaging waste and its environmental impact. Business will be liable to pay EPR fees based on the amount of packaging they put into the market.
It is therefore vital the business continues to scale to drive cost efficiencies, increased productivity and economies of scale. We are confident our new 5 Year Growth Strategy will deliver such improvements.
This is an exciting time for Virgin Wines and the whole team is highly motivated to deliver our new Growth Strategy, which is expected to deliver increased revenue growth, enhanced long-term profitability and create incremental shareholder value.
FINANCIAL REVIEW
Profit before tax
Against a backdrop of economic uncertainty Profit before tax increased by 20% to £1.3m (H1 2024: £1.1m). This reflected the continued stability of the unique business model including the loyalty of the active customer base, disciplined cost management and strong working capital controls generating free cash. This discipline has always been a feature of the business and one that will continue, notwithstanding the new strategy around investment and driving customer acquisition harder.
Revenue
Group revenue was broadly in line at £34.1m (H1 2024: £34.3m). This was supported by an improved performance in Q2 which saw year on year revenue improve by 2.1%.
Gross profit
Reported Gross Profit margin decreased by 1.4% to 29.7% (H1 2024: 31.1%). This was the result of a more proactive and determined approach to new customer acquisition in terms of strength of offers and the trialling of new customer acquisition formats. Reported Gross Profit margin includes the cost of wine, duty, packaging and delivery costs.
EBITDA
EBITDA was unchanged at £1.6m, (H1 2024: £1.6m) despite a highly inflationary environment and significant cost pressures, which were mitigated by a 10.1% reduction in operating variable costs compared to H1 2024.
Share based payments
The Group provided for a share-based payment expense of £34k (H1 2024: £137k) relating to the share based long-term incentive plan for the leadership team.
Finance income
Finance income improved to £372k (H1 2024: £161k) frombank interest earned on cash balances. The improvement is due to strong working capital controls, in particular ensuring inventory levels are appropriate for the scale of the operation.
Finance expenses
Finance expenses of £68k (H1 2024: £80k) relates to the interest charge for Right of Use Assets. The Group has no borrowings so there are no expenses relating to servicing overdrafts or loans.
Earnings per share
Earnings per share increased to 1.6p from 1.4p in H1 2024 due to the increase in Group Profit. Diluted earnings per share were 1.6p (H1 2024: 1.4p).
Dividend
The Board is not recommending the payment of an interim dividend, but it will keep the Group's dividend policy under review as part of the decision-making process around capital allocation and the growth strategy announced separately.
Foreign currency
All Group income is derived from UK activity and denominated in GBP. The Group purchases supplies, mainly wine, from the global market predominantly in Euros, US Dollars and Australian Dollars. The Group hedges its foreign currency purchases to provide clarity on future cost prices.
Inventory
Closing Inventory was £6.5m, 22% or £1.9m lower than December 2023 (H1 2024: £8.4m). We continue to monitor the wine range and supply chain to ensure we optimise the carrying value of inventories.
Cash
Gross cash at the period end was £23.7m, an increase on H1 2024 which was £17.4m. The net cash in hand excluding WineBank deposits was up £6.3m to a healthy £17.3m, H1 2024: £11.0m. WineBank deposits remain unchanged at £6.4m, H1 2024: £6.4m. The WineBank deposits are ring fenced and are not used to fund stock purchases or working capital.
Jay Wright
Chief Executive Officer
26 March 2025
Condensed consolidated statement of comprehensive income
|
| Note | Unaudited 27 December 2024 £'000 | Unaudited 29 December 2023 £'000 |
| Revenue |
| 34,084 | 34,286 |
| Cost of sales
|
| (23,962) | (23,632) |
| Gross profit |
| 10,122 | 10,654 |
|
Operating expenses |
| (9,153) | (9,678) |
|
Operating profit | 3 | 969 | 976 |
|
Finance income | 5 | 372 | 161 |
| Finance costs | 6 | (68) | (80) |
|
Profit before taxation |
| 1,273 | 1,057 |
|
Taxation |
| (352) | (256) |
|
Profit for the financial period and total comprehensive income |
| 921 | 801 |
|
Basic earnings per share (pence) | 7 | 1.6 | 1.4 |
|
Diluted earnings per share (pence) | 7 | 1.5 | 1.4 |
Condensed consolidated statement of financial position
| | |
| Unaudited | Unaudited | Audited |
|
| | Note | 27 December 2024 | 29 December 2023 | 28 June |
| | | 2024 | |||
| | |
| £'000 | £'000 | £'000 |
| ASSETS | | | | | |
| Non-current assets | | | | | |
| Intangible assets | 8 | 11,067 | 11,145 | 11,159 | |
| Property, plant and equipment | 9 | 133 | 306 | 202 | |
| Right of use assets | 10 | 2,120 | 2,620 | 2,370 | |
| Deferred tax asset | | 28 | 240 | 194 | |
| Total Non-current assets | | 13,348 | 14,311 | 13,925 | |
| | | | | | |
| Current assets | | | | | |
| Inventories | | | 6,517 | 8,400 | 5,868 |
| Trade and other receivables | 11 | 2,656 | 2,689 | 2,684 | |
| Derivative financial instruments | | 11 | 6 | - | |
| Cash and cash equivalents | | 23,661 | 17,412 | 18,370 | |
| Total current assets | | 32,845 | 28,507 | 26,922 | |
| | | | | | |
| Total assets | | | 46,193 | 42,818 | 40,847 |
| | | | | | |
| LIABILITIES AND EQUITY | | | | | |
| Current liabilities | | | | | |
| Trade and other payables | 12 | (19,067) | (16,718) | (14,425) | |
| Derivative financial instruments | | - | - | (3) | |
| Lease liability | | | (544) | (534) | (539) |
| Loans and borrowings | | - | - | - | |
| Total current liabilities | | (19,611) | (17,252) | (14,967) | |
| | | | | | |
| Non-current liabilities | | | | | |
| Provisions | | | (390) | (344) | (367) |
| Lease liability | | | (1,917) | (2,462) | (2,193) |
| Total non-current liabilities | | (2,307) | (2,806) | (2,560) | |
| | | | | | |
| Total liabilities | | | (21,918) | (20,058) | (17,527) |
| | | | | | |
| Net assets | | | 24,275 | 22,760 | 23,320 |
| | | | | | |
| Equity | | | | | |
| Share capital | | 13 | 560 | 558 | 560 |
| Share premium | | | 11,989 | 11,989 | 11,989 |
| Own share reserve | | (3) | - | (3) | |
| Merger reserve | | | 65 | 65 | 65 |
| Other reserve | | | 586 | 539 | 552 |
| Retained earnings | | 11,078 | 9,609 | 10,157 | |
| Total Equity | | | 24,275 | 22,760 | 23,320 |
Condensed consolidated statement of changes in equity
| | Called up share capital | Share premium | Own share reserve | Merger reserve | Other reserve | Retained earnings | Total Shareholders' funds |
| | |||||||
| | |||||||
| | |||||||
| | £'000 | £'000 | £'000 | £'000 |
| £'000 | £'000 |
| | | | | | | | |
| 1 July 2023 | 558 | 11,989 | - | 65 | 402 | 8,808 | 21,822 |
| | | | | | | | |
| Profit for the financial year | - | - | - | - | - | 801 | 801 |
| Share-based payments | - | - | - | - | 137 | - | 137 |
| | | | | | | | |
| 29 December 2023 unaudited | 558 | 11,989 | - | 65 | 539 | 539 | 22,760 |
| | | | | | | | |
| 29 June 2024 | 560 | 11,989 | (3) | 65 | 552 | 10,157 | 23,320 |
| | | | | | | | |
| Profit for the financial year | - | - | - | - | - | 921 | 921 |
| Share-based payments | - | - | - | - | 34 | - | 34 |
| | | | | | | | |
| 27 December 2024 unaudited | 560 | 11,989 | (3) | 65 | 586 | 11,078 | 24,275 |
Condensed consolidated statement of cash flows
|
|
|
|
|
| Unaudited | Unaudited |
|
|
|
|
|
| 27 December 2024 | 29 December 2023 |
|
|
|
|
|
| ||
|
|
|
|
|
| £'000 | £'000 |
| Cash flows from operating activities | | | | |||
| Profit before taxation | | | | 1,273 | 1,057 | |
| Adjustments for: | | | | | | |
| Depreciation and amortisation | | | 643 | 642 | ||
| Net finance costs | | | | (304) | (81) | |
| Share-based payment | | | | 34 | 137 | |
| Decrease/(increase) in trade and other receivables | 43 | (80) | ||||
| Increase in inventories | | | | (649) | (33) | |
| (Decrease)/increase in trade and other payables | | 4,449 | 2,522 | |||
| Net cash (used in)/generated from operating activities | 5,489 | 4,164 | ||||
| | | | | | | |
| Cash flows from investing activities | | | | |||
| Interest received | | | | 372 | 161 | |
| Purchase of intangible and tangible fixed assets | | (232) | (90) | |||
| Net cash used in investing activities |
| 140 | 71 | |||
| | | | | | | |
| Cash flows from financing activities | | | | |||
| Payment of lease liabilities | | | (270) | (257) | ||
| Payment of lease interest | | | | (68) | (80) | |
| Net cash used in financing activities |
| (338) | (337) | |||
| | | | ||||
| Net (decrease)/increase in cash and cash equivalents | 5,291 | 3,898 | ||||
| | | | | | | |
| Cash and cash equivalents at beginning of period | | 18,370 | 13,514 | |||
| Cash and cash equivalents at end of period | | 23,661 | 17,412 | |||
| | | | | | 5,291 | 3,898 |
Notes to the interim financial information
1. General Information
The principal activity of the Group is import and distribution of wine.
The Company was incorporated on 1 February 2021 in the United Kingdom and is a public company limited by shares registered in England and Wales. The registered office is 37-41 Roman Way Industrial Estate, Longridge Road, Ribbleton, Preston, Lancashire, United Kingdom, PR2 5BD. The registered company number is 13169238.
2. Significant accounting policies
Basis of preparation
The consolidated interim financial information of the Virgin Wines UK Plc group have been prepared in accordance with the principal accounting policies used in the Group's consolidated financial statements for the year ended 28 June 2024. These interim financial statements should be read in conjunction with those consolidated financial statements, which have been prepared in accordance with the international accounting standards in conformity with the requirements of the Companies Act 2006.
These interim financial statements do not fully comply with IAS 34 'Interim Financial Reporting', as is currently permissible under the rules of AIM.
Historical cost convention
The interim financial information has been prepared on a historical cost basis except for certain financial assets and liabilities (including derivative instruments), measured at fair value through the income statement.
Going concern
The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chief Executives Statement, which also describes the financial position of the Group.
During the period the Group met its day to day working capital requirements through cash generated from operating activities. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate using cash generated from operations, and that no additional borrowing facilities will be required. Having assessed the principal risks, the directors considered it appropriate to adopt the going concern basis of accounting in preparing its consolidated financial statements.
Goodwill
Goodwill is not amortised but is reviewed annually for impairment. The recoverable amount of the Group's single cash-generating unit (CGU) is determined by calculating its value in use. The value in use calculation requires the
Group to estimate the future cash flows expected to arise from the single CGU and to use a suitable discount rate in order to calculate the present value. The value in use is then compared to the total of the relevant assets and liabilities of the CGU.
3. Operating profit
Operating profit is stated after charging/(crediting):
| | | | | | | | Unaudited | Unaudited |
|
| | | | | | | 27 December 2024 | 29 December 2023 |
|
| | | | | | | ||
| | | | | | | | £'000 | £'000 |
|
| | | | | | | | |
| Inventory charged to cost of sales | | | | | 22,144 | 21,575 | ||
| Amortisation of intangible asssets (note 8) | | | | 299 | 272 | |||
| Depreciation of property, plant and equipment (note 9) | | | 94 | 120 | ||||
| Depreciation of right of use asset (note 10) | | | | 250 | 250 | |||
| Net exchange gains (including movements on fair value through profit and loss derivatives) | (32) | (22) | ||||||
| | | |||||||
| Movement in inventory provision | | | | | (9) | (38) | ||
4. Share-based payments
In the period ended 27 December 2024 the Group operated an equity-settled share-based payment plan as described below.
The charge in the period attributed to the plan was £34k (2023: £137k).
Under the Virgin Wines UK Plc Long-Term Incentive Plan, the Group gives awards to Directors and senior staff subject to the achievement of a pre-agreed revenue and net profit figure for the financial year of the Group, three financial years subsequent to the date of the award. These shares vest after the delivery of the audited revenue and profit figure for the relevant financial year has been announced.
Awards are granted under the plan for no consideration and carry no dividend or voting rights.
Awards are exercisable at the nominal share value of £0.01.
Awards are forfeited if the employee leaves the Group before the awards vest, except under circumstances where the employee is considered a 'Good Leaver'.
| | | | | | | | Unaudited | Unaudited |
| | | | | | | | 27 December 2024 | 29 December 2023 |
| | | | | | | | ||
| | | | | | | | Number of Shares | Number of Shares |
| | | | | | | | | |
| Outstanding at start of period | | | | | | 4,189,777 | 2,811,645 | |
| Granted during the period | | | | | | - | - | |
| Outstanding at end of period | | | | | | 4,189,777 | 2,811,645 | |
The Company granted its first share options on 23 June 2021. Further share options were granted on 6 December 2021, 6 December 2022 and 30 April 2024.
The awards outstanding at 27 December 2024 have a weighted average remaining contractual life of 8.6 years (2023: 8.7 years).
The fair value at grant date was determined with reference to the share price at grant date, as there are no market-based performance conditions and the expected dividend yield is 0%. Therefore there was no separate option pricing model used to determine the fair value of the awards.
5. Finance income
| | | | | | | | Unaudited | Unaudited |
| | | | | | | | 27 December 2024 | 29 December 2023 |
| | | | | | | | ||
| | | | | | | | £'000 | £'000 |
| | | | | | | | | |
| Bank interest | | | | | | | 372 | 161 |
6. Finance costs
| | | | | | | | Unaudited | Unaudited |
|
| | | | | | | 27 December 2024 | 29 December 2023 |
|
| | | | | | | ||
| | | | | | | | £'000 | £'000 |
|
| | | | | | | | |
| Interest payable for lease liabilities | | | | | 68 | 80 | ||
7. Earnings per share
Basic and diluted earnings per share are calculated by dividing the earnings attributable to equity shareholders by the weighted average number of ordinary shares in issue during the period.
The calculation of basic profit per share is based on the following data:
| Statutory EPS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Unaudited | Unaudited |
|
|
|
|
|
|
|
| 27 December 2024 | 29 December 2023 |
| | | | | | | | ||
| Earnings (£'000) | | | | | | | | |
| Profit after tax | | | | | | | 921 | 801 |
| | | | | | | | | |
| Earnings for the purpose of basic earnings per share | | | | 921 | 801 | |||
| | | | | | | | | |
| Number of shares | | | | |||||
| Weighted average number of shares for the purposes of basic earnings per share | 55,972,405 | 55,837,560 | ||||||
| Weighted average number of shares for the purposes of diluted earnings per share | 60,162,182 | 58,649,205 | ||||||
| | | | | | | | | |
| Basic earnings per ordinary share (pence) | | | | 1.6 | 1.4 | |||
| | | | | | | | | |
| Diluted earnings per ordinary share (pence) | | | | 1.5 | 1.4 | |||
8. Intangible assets
| | | | | | | Group |
| | | | | Goodwill | Software | Total |
| | | | | £'000 | £'000 | £'000 |
| | | | | | | |
| Cost | | | | | | |
| At 1 July 2023 | | | | 9,623 | 3,480 | 13,103 |
| Additions | | | | - | 67 | 67 |
| 29 December 2023 unaudited | | | 9,623 | 3,547 | 13,170 | |
| | | | | | | |
| At 29 June 2024 | | | | 9,623 | 3,872 | 13,495 |
| Additions | | | | - | 207 | 207 |
| 27 December 2024 unaudited | | | 9,623 | 4,079 | 13,702 | |
| | | | | | | |
| Accumulated amortisation and impairment | | | | |||
| At 1 July 2023 | | | | - | 1,753 | 1,753 |
| Amortisation charge | | | - | 272 | 272 | |
| 29 December 2023 unaudited | | | - | 2,025 | 2,025 | |
| | | | | | | |
| At 29 June 2024 | | | | - | 2,336 | 2,336 |
| Amortisation charge | | | - | 299 | 299 | |
| 27 December 2024 unaudited | | | - | 2,635 | 2,635 | |
| | | | | | | |
| Net book value | | | | | | |
| At 27 December 2024 unaudited | | 9,623 | 1,444 | 11,067 | ||
| | | | | | | |
| At 28 June 2024 audited | | | 9,623 | 1,536 | 11,159 | |
| | | | | | | |
| At 29 December 2023 unaudited | | 9,623 | 1,522 | 11,145 | ||
| | | | | | | |
9. Property, plant and equipment
| | | Leasehold property | Computer hardware & warehouse equipment |
| |
| | | Fixtures & fittings |
| ||
| | | | |||
| | | Total | |||
|
| | £'000 | £'000 | £'000 | £'000 |
| Cost |
| | | | |
| At 1 July 2023 | | 20 | 980 | 538 | 1,538 |
| Additions | | - | 9 | 15 | 24 |
| 29 December 2023 unaudited | 20 | 989 | 553 | 1,562 | |
| | | | | | |
| At 29 June 2024 | | 20 | 994 | 552 | 1,566 |
| Additions | | - | 25 | - | 25 |
| 27 December 2024 unaudited | 20 | 1,019 | 552 | 1,591 | |
|
| | | | | |
| Accumulated depreciation | | | | | |
| At 1 July 2023 | | 20 | 750 | 366 | 1,136 |
| Charge for the year | | - | 69 | 51 | 120 |
| 29 December 2023 unaudited | 20 | 819 | 417 | 1,256 | |
| | | | | | |
| At 29 June 2024 | | 20 | 882 | 462 | 1,364 |
| Charge for the period | | - | 53 | 41 | 94 |
| 27 December 2024 unaudited | 20 | 935 | 503 | 1,458 | |
|
| | | | | |
| Net book value |
| | | | |
| At 27 December 2024 unaudited | - | 84 | 49 | 133 | |
| | | | | | |
| At 28 June 2024 audited | | - | 112 | 90 | 202 |
| | | | | | |
| At 29 December 2023 unaudited | - | 170 | 136 | 306 | |
Depreciation is charged to operating expenses in the profit and loss account.
10. Right of use assets
| | | Leasehold property | Computer hardware & warehouse equipment |
|
| | |
| ||
| | |
| ||
| | | Total | ||
| | | £'000 | £'000 | £'000 |
| | | | | |
| Cost | | | | |
| At 1 July 2023 | | 5,060 | 252 | 5,312 |
| 29 December 2023 unaudited | 5,060 | 252 | 5,312 | |
| | | | | |
| At 29 June 2024 | | 5,060 | 252 | 5,312 |
| 27 December 2024 unaudited | 5,060 | 252 | 5,312 | |
| | | | | |
| Accumulated depreciation | | | | |
| At 1 July 2023 | | 2,357 | 85 | 2,442 |
| Charge for the period | | 225 | 25 | 250 |
| 29 December 2023 unaudited | 2,582 | 110 | 2,692 | |
| | | | | |
| At 29 June 2024 | | 2,807 | 135 | 2,942 |
| Charge for the period | | 225 | 25 | 250 |
| 27 December 2024 unaudited | 3,032 | 160 | 3,192 | |
| | | | | |
| Net book value | | | | |
| At 27 December 2024 unaudited | 2,028 | 92 | 2,120 | |
| | | | | |
| At 28 June 2024 audited | | 2,253 | 117 | 2,370 |
| | | | | |
| At 29 December 2023 unaudited | 2,478 | 142 | 2,620 | |
11. Trade and other receivables
| | | | Unaudited | Unaudited |
|
| | | | 27 December 2024 | 29 December 2023 | 28 June 2024 |
|
| | | |||
| | | | £'000 | £'000 | £'000 |
| Amounts falling due within one year: | | | | ||
| | | | | | |
| Trade receivables | | | 1,984 | 1,591 | 1,034 |
| Prepayments | | | 672 | 966 | 1,523 |
| Other receivables | | | - | 132 | 127 |
| | | | | | |
| | | | 2,656 | 2,689 | 2,684 |
12. Trade and other payables
| | | Unaudited | Unaudited |
|
| | | 27 December 2024 | 29 December 2023 | 28 June 2024 |
|
| | |||
| | | £'000 | £'000 | £'000 |
|
| | | | |
| Trade payables | 5,975 | 4,648 | 2,398 | |
| Taxation and social security | 4,275 | 3,119 | 1,675 | |
| Contract liabilities | 6,908 | 6,548 | 8,703 | |
| Accruals and other creditors | 1,909 | 2,403 | 1,649 | |
| | | | | |
| | | 19,067 | 16,718 | 14,425 |
13. Share capital
|
|
| | | | |
| | | | Unaudited | Unaudited |
|
| | | | 27 December 2024 | 29 December 2023 | 28 June 2024 |
| | | | |||
| | | | £'000 | £'000 | £'000 |
| Authorised, Allotted, called up and fully paid | | | | ||
| 55,972,405 (2023: 55,837,560) ordinary shares of £0.01 each | 560 | 558 | 560 | ||
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