Shares in Virgin Wines (VINO:AIM) bubbled up 4.6% to 192.5p on Thursday after the direct-to-consumer online wine purveyor uncorked palate-pleasing results for the year to June 2021.
Sales grew by more than 30% for the second successive year, to £73.6 million, and pre-exceptional pre-tax profit fizzed 86% higher to £5.2 million as the premium wines purveyor profited from the accelerated wine buying shift online induced by the pandemic.
Reassuringly however, Virgin Wines’ positive trading momentum has continued into the new financial year. Sales for the first quarter to September were up 13.3% in the face of a tough prior year comparative, while the number of new customers acquired rose by a pleasing 10.7%.
This all comes despite the end of lockdowns and the reopening of the on-trade, with Virgin Wines, whose growth attractions Shares highlighted here in April, benefiting from continued support from customers acquired during lockdowns and seeing new customers venturing into the online wine market for the first time.
STOCKED-UP FOR CHRISTMAS
Though many businesses are being hit by supply chain disruption and cost inflation, Virgin Wines took the decision to stock up for the key Christmas trading period last year well in advance to mitigate any stock availability issues.
As a result, the AIM-listed company remains confident that it is ‘well placed to continue to supply our customers with a full range of wines, beers and spirits from around the world, without limitations’.
Commenting on the results, CEO Jay Wright said: ‘Our focus this year has been on acquiring increased numbers of new customers, converting them to become long-term advocates of Virgin Wines, whilst maximising the loyalty of our existing customers, and in turn, driving growth in our overall customer base.’
Wright added that his charge has also seen ‘substantial growth in our gift and commercial channels, made significant headway in developing our craft beer and quality spirit offerings, all whilst continuing to deliver the very highest levels of customer service.’
THE LIBERUM VIEW
Following the results, Liberum Capital reiterated its ‘buy’ rating on Virgin Wines with a 300p price target, though the broker prudently left its forecasts unchanged with the company lapping demanding comparatives over the next two quarters.
‘Complementary offerings in individual gifting, corporate, and beers and revenues are growing strongly but remain small with significant available opportunity’, said Liberum.
The broker added that Virgin Wines’ unique open source buying model leaves it ‘well placed to deal with supply chain cost inflation and delays, and stock availability remains robust for the upcoming peak trading period. We believe Virgin Wines offers a compelling investment case with high growth and predictable future revenues.’
