Virgin Wines shares plummet after Queen’s death
According to Virgin Wines UK, the passing of Queen Elizabeth II last September contributed to the business losing £1.7 million.
The UK arm of Virgin Wines issued a profit warning yesterday that caused shares to drop 24% to 56p. Sales for the full year are expected to be around the £63 million mark compared with £69 million the previous year.
Among the reasons cited for the sliding revenue and profit was the “one-off, exceptional circumstance” of the death of Her Majesty the Queen, which caused Virgin UK to halt all marketing activities to observe the country’s mourning period, out of respect for the late monarch.
Last June, Virgin Wines launched a Platinum Jubilee Limited Edition English Sparkling Brut to celebrate Queen Elizabeth II’s “70 glorious years on the throne”. Only 500 bottles were made of this small-batch jubilee bubbly.
“We are disappointed with our profitability performance over what has been a difficult trading period, which has been exacerbated by one-off exceptional circumstances,” said chief executive Jay Wright.
The Virgin boss also said that the Christmas period, which was riddled with post strikes and bad weather, also played a part in the company’s declining sales, as did bedding in problems with a new warehouse management system it had introduced.
Cut-off dates for Christmas deliveries being brought forward by couriers were also blamed for the poor performance, which Virgin UK said led to approximately £1.5 million loss in revenue.
However, Virgin Wines said it had attracted a significant number of new customers during the first half of the financial year 2023, with 60,000 new customers during the period, an increase of 4% from a year ago. Of these, the company welcomed 42,000 new customers to its WineBank subscription service , up 21% from the year before, though the firm noted that the average spend per subscription customer for the first half of the year dropped from £258 to £231.
“Our underlying business model remains resilient as the consumer proposition continues to resonate strongly,” said Wright.