TIDMVINO
RNS Number : 8134S
Virgin Wines UK PLC
14 March 2023
Virgin Wines UK plc
("Virgin Wines", the "Company" or the "Group)
Unaudited interim results for the six months ended 31 December
2022
Strong performance from flagship WineBank scheme despite tough
trading conditions
Virgin Wines UK plc (AIM: VINO), one of the UK's largest direct
to consumer online wine retailers, today announces its interim
results for the six months ended 31 December 2022 ("H1 2023").
Financial highlights
-- Total revenue of GBP33.6m (H1 2022: GBP40.6m; H1 2020(1) : GBP26.2m)
-- Underlying EBITDA of GBP1.4m (H1 2022: GBP3.9m; H1 2020: GBP1.5m)
-- Profit before tax of GBP0.1m (H1 2022: GBP3.2m; H1 2020: GBP0.5m)
-- Earnings per share of 0.1p (H1 2022: 4.6p; H1 2020: 1.1p)
-- Net cash(2) of GBP7.6m (1 July 2022: GBP7.8m)
Strategic highlights
-- Customer base remains strong:
o Over 60k new customers acquired in H1 (+4% since H1 2022 and a
24% LFL increase during Q2)
o Recruitment onto WineBank was particularly strong (+21%
year-on-year), achieving record number of members (142k), and
deposits at end of December of GBP6.5m (+25% year-on-year)
o Cost per recruit remained low, and was ahead of our
expectations, at GBP11.82 (H1 2022: GBP13.62)
o Continued stable, low cancellation rates
-- New strategic partnerships continued to perform well
o Saga launched in November, generating over 2k new members in
the lead-up to Christmas
o Partnerships with Moonpig, Avanti West Coast, LNER, Great
Western Railway and Virgin Red have been pivotal in driving revenue
through the B2B channel. Revenue through Moonpig up 283%
year-on-year, whilst growth in the Virgin Red loyalty programme
delivered 77% year-on-year growth
o Commercial continues to accelerate year-on-year, with growth
of +25% vs H1 2021 and 71% ahead of H1 2020 levels
-- Record product gross margin achieved through DTC repeat sales
channels, despite inflationary pressures, at 41.1% (H1 2022: 40.4%;
H1 2020: 38.9%)
Current trading and outlook
-- January and February trading broadly in line with
expectations with consistently resilient demand among loyal
customers
-- Issues identified with new Warehouse Management System (WMS)
being rectified and supporting more normalised trading into H2
-- As the landscape remains challenging, we continue to be
disciplined with our marketing investment, focusing on low cost
recruitment and maximising value from the existing customer
base
-- Business review underway to identify new initiatives for future growth and profitability
-- As previously announced, the Board expects revenue for FY23
to be around GBP63m, full year EBITDA margin to be between 4% and
5%, and EBITDA margin excluding exceptional factors to be 2%
higher, in the range of 6-7%
(1) All references to H1 2020 in this document are to show the
comparative position to the Pre-Covid performance
(2) Net cash of GBP7.6m is total cash of GBP14.1m less Wine Bank customer deposits of GBP6.5m
Jay Wright, Chief Executive Officer at Virgin Wines, said:
"As previously announced in our year-end trading update,
profitability was impacted during the first half, with a number of
macroeconomic headwinds exacerbating certain internal and
operational challenges which we encountered particularly over our
peak Christmas trading period.
"However, we continue to make progress on addressing the
challenges where we can, and we remain confident in the future
growth prospects of Virgin Wines. This is underpinned by the
fundamental strength of our business model and consumer
proposition, with our customers remaining loyal and ever-increasing
numbers signing up to our WineBank subscription scheme.
Furthermore, our exciting new strategic partnerships continue to be
a key focus in helping to introduce our brand's unique,
high-quality products and service to new customers every day. The
growth in our WineBank membership and continued focus on low cost
customer acquisition, disciplined cost control, maximising gross
margins and optimising working capital to maximise free cash flow,
places us in an advantageous position to capitalise on
opportunities as the cost of living crisis eases."
Enquiries:
Virgin Wines UK plc Via Hudson Sandler
Jay Wright, CEO
Graeme Weir, CFO
Liberum Capital Limited
(Nominated Adviser and Sole Broker)
Clayton Bush
Edward Thomas
John Fishley
Lucas Bamber
Hudson Sandler
(Public Relations)
Alex Brennan
Dan de Belder
Charlotte Cobb
Harry Griffiths
Tel: +44 20 3100 2222
virginwines@hudsonsandler.com
Tel: +44 20 7796 4133
Notes to editors:
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, which is headquartered in Norwich, UK, 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 has more than 500 wines, 250 spirits and 100 beers
in its portfolio, which it sells to an active customer base of
187,000 members. It has approximately 200 employees and more than
40 trusted winemaking partners and suppliers around the world.
The Company drives the majority of revenue though its
fast-growing WineBank subscription scheme, using a variety of
marketing channels, as well as through its Wine Advisor team, Wine
Plan channel and Pay As You Go service.
Along with its extensive range of award-winning products, Virgin
Wines was delighted to be named Online Drinks Retailer of the Year
for 2022 at this year's Drinks Retailing Awards, as well as
receiving the bronze award for Contact Centre of the Year at the
2022 UK National Contact Centre Awards.
https://www.virginwinesplc.co.uk/
RESULTS Unaudited Unaudited
31-Dec 31-Dec
GBP000's 2022 2021
Revenue 33,627 40,609
Gross Profit 9,774 12,630
Underlying operation expenses (8,368) (8,760)
1,406
Underlying EBITDA (3) 3,870
Profit before tax 90 3,159
Net Assets 22,235 20,355
(3) After adding back GBP616k for exceptional one off costs relating to the WMS implementation
CHIEF EXECUTIVE'S STATEMENT
Business overview
We continue to see adverse trading conditions and challenges
impacting the sector, with well-documented inflationary pressures
and cost of living issues affecting consumer spend and frequency of
order.
In addition, as previously reported, the Group was impacted
during the period by a number of one-off factors, including over
the two weeks of national mourning following the passing of Queen
Elizabeth II in September and the peak Christmas trading period.
Internally, this involved teething problems with the implementation
of our new Warehouse Management System (WMS) to support the
operation of our two warehouses, and externally we saw the negative
effects on the courier network following the postal strikes and bad
weather leading up to Christmas. The issues surrounding the WMS
implementation, in particular, resulted in significant exceptional
one-off costs to the business, and necessitated an early sales
cut-off one week prior to Christmas, leading to approximately
GBP1.5m in lost revenue.
In the face of these challenges, the Group has remained strongly
focused on the implementation of its strategy, including the
acquisition of new customers through a number of channels onto our
subscription schemes at a consistently low cost per recruit. Price
increases have also been implemented where appropriate, to help
mitigate inflationary pressures whist being mindful of minimising
any impact on competitiveness and value.
Despite the challenging environment, the underlying mechanics of
the business are in good health, demonstrating the resilience of
the core business model. This includes the Group's consistent focus
on acquiring high numbers of new customers at low cost, increasing
our loyal WineBank membership base, growing our B2B business
channel, margin expansion in the repeat DTC channels (despite
significant cost pressures) and the Group remaining debt free
whilst maintaining significant cash reserves and a high-quality,
appropriate level of inventory on the balance sheet.
Trading overview
Revenue for H1 2023 was GBP33.6m (H1 2022: GBP40.6m). The
Company delivered an underlying EBITDA of GBP1.4m (H1 2022:
GBP3.9m). As previously announced, the reduction in sales over H1
coupled with the exceptional costs associated with the WMS
implementation had a material impact on the profitability of the
business. We estimate that, together, the one-off issues associated
with the reduction in September trading and the early cut-off for
Christmas impacted H1 revenue by circa GBP3.26m, whilst the profit
lost from those sales negatively affected EBITDA by a further
GBP1m.
Despite this challenging backdrop, the business acquired over
60k new customers over the first six months of the year with
recruitment onto the flagship WineBank subscription scheme
particularly strong (+21% year-on-year) leading to a total
membership number of 142k, +9%. Cost per recruit was also well
controlled, and ahead of expectations, at just GBP11.82 (H1 2022:
GBP13.62).
The Commercial arm of the business continues to accelerate
year-on-year, generating growth of +25% vs H1 2021 and 71% ahead of
H1 2020 levels. In particular, our partnerships with Moonpig (+283%
year-on-year) and Virgin Red (+77% year-on-year) performed
strongly.
Gross margin achieved record levels through the DTC repeat sales
channels despite the pressures on the dry goods element of a bottle
of wine (eg glass, packaging, capsule, freight and filling). Margin
increased through the core repeat channels to 41.1% from 40.4% in
H1 2022 and from 38.9% in H1 2020. The flexibility of our open
source buying model enables us to focus globally on the best
quality/value ratios and we can configure the contents of our
pre-mixed cases to achieve this.
The Group has maintained its very strong cash position,
remaining debt free and providing the scope to assess new
opportunities to invest in growth in what has become a
significantly different consumer environment to that of 18 months
ago.
Customer acquisition
Through its disciplined, focused and robust customer acquisition
strategy, the Group has made great progress in attracting thousands
of new recruits and in a consistent manner year after year. Over
60k new customers were recruited during the period, which was 4%
ahead of the comparable period last year and a 24% LFL increase
during Q2 (Q2 2023: 44,000; Q2 2022: 35,600).
Cost per recruit was also ahead of expectations, remaining low
at GBP11.82 (H1 2022: GBP13.62). However, the competitive landscape
and pressure on pricing has led to more competitive offers in the
market, including a proportion of 6 bottle deals. This, alongside
the rise in wine costs, has led to an increase in the fully costed
cost per recruit to GBP20.51 (H1 2022: GBP11.75).
The business was delighted to launch its partnership with Saga
in mid-November and was encouraged to see over 2k members taking
advantage of the service over the lead-up to Christmas. This was
ahead of expectations and a positive result in a short period of
time.
WineBank subscription scheme and customer behaviour
The key driver of repeat sales for the business is our WineBank
subscription scheme. The total membership of the scheme hit record
levels in the period, at 142k customers (up 9% from 130k in June
2022). WineBank customer deposits are also at a record level for
the end of December at GBP6.5m, up 25% from the same point last
year.
Customers have remained loyal to the WineBank scheme but have
lengthened the average period of time between orders in light of
recent macroeconomic challenges. This trend in customer frequency
of order has been a key factor in the year-on-year fall in revenue
through the main repeat sales channels, resulting in total H1
revenue from WineBank customers declining by 10.8% year-on-year,
albeit still 65% ahead of H1 2020 levels.
The cancellation rate remains relatively stable and in line with
long-term rates, at 17.8%. Whilst this has ticked up from 16.7% at
the same point last year, this is a relatively small movement
considering the dramatic change in consumer confidence and the
trading environment. This also bodes well for when the cost of
living crisis eases as it highlights our customers' loyalty to the
scheme, despite them currently scaling back on their average spend
per annum.
The trade rate for the full active customer base shows a similar
trend, falling from 69.6% in H1 2022 to 68.4% in H1 2023, whilst
the lapsed rate increased from 32.7% in H1 2022 to 34.7% in H1
2023. Given the significantly different consumer landscape these
are relatively minor movements, and show the resilience of the
customer base as a whole.
Given the shortfall in sales in H1 2023, there was a fall in the
sales retention rate from 91% in FY 2022 to 80% in H1 2023, driven
primarily by a reduction in order frequency as the customer
retention rate fell less substantially, from 88% in H1 2022 to 84%
in H1 2023.
Strategic partnerships
The Group continues to focus its efforts on forging strategic
partnerships to help drive both its customer acquisition and its
commercial channels. Partnerships with Moonpig, Avanti West Coast,
LNER, Great Western Railway and Virgin Red have all been pivotal in
driving revenue through the B2B channel and continuing its steady
year-on-year growth.
Similarly, the customer acquisition channel has used
partnerships as the core method to attract significant numbers of
new customers to Virgin Wines. In particular, relationships with
Currys, On The Market, Go Outdoors, Rail Delivery Group, O2, The
Daily Mail and Saga plc (amongst many others) have underpinned our
ability to deliver a substantially increased number of new recruits
into the business over H1 2023.
We believe the benefit we can drive from both new and existing
strategic partnerships has significant headroom for further growth,
which the Group continues to target.
Open source buying driving our exclusive wine range
Given the pressure on the cost of producing wine, which has been
driven by the escalation in dry goods such as glass, packaging and
freight, it has become more important than ever that the business
is able to work with its large, long-standing network of winemakers
and wineries all around the world to deliver the very best quality
and value wines possible.
It has been the ability to leverage this vital part of our
unique model that has allowed the margin expansion that has been
delivered to the repeat sales channels whilst managing price
increases to remain attractive and competitive. It has also allowed
the business to manage inventory levels to maximise the breadth and
range of our portfolio without holding unnecessarily high levels of
stock or having large ongoing commitments.
Operations
Following a thorough review of the new Warehouse Management
System, our teams have started to implement the necessary measures
to resolve the issues experienced during the period. As a result,
the Group is already seeing a return to more normal operations in
H2, with over 97% of orders placed before 4pm being despatched the
same day.
Whilst there is still work to do to deliver the operational
costs we aim for, our initial focus has been on ensuring our
customers receive the highest levels of service and quality
possible. With that now in place, we will continue to drive the
cost per case down, prove that the system is robust and delivers
full stability while stress testing to prove the capability for
operational efficiency at peak trading.
Outlook
The consumer landscape remains challenging as customers continue
to be prudent with their expenditure on discretionary purchases. We
do not expect this trend to unwind in the near future, so we will
continue to be disciplined with our marketing investment, focusing
on low-cost recruitment and maximising value from the existing
customer base.
We are confident that the one-off issues surrounding the WMS
will continue to unwind over H2 and we can drive the business back
to operational efficiency and with a platform in place that will
allow significant future growth. Whilst we understand that there
will continue to be pressure on revenue due to current levels of
consumer confidence and on costs due to the inflationary climate,
we believe that the core business model is robust, and the business
can continue to trade resiliently in the short term and thrive in
the longer term as the consumer landscape improves.
The business has traded broadly in line with expectations over
January and February, continues to be profitable with consistently
strong cash reserves and, as previously announced, the Board
expects top-line performance in H2 to remain resilient. Full year
revenue and profit will be impacted by the factors in H1 outlined
above and, as a result, as previously announced, the Board expects
revenue for FY23 to be around GBP63m, full year EBITDA margin to be
between 4% and 5%, and EBITDA margin excluding exceptional factors
to be 2% higher, in the range of 6-7%.
Business review
Given the shift in consumer confidence over the past 15 months,
the macro challenges that we are facing, and the changes
experienced across our trading environment versus that experienced
during the Covid period, the business is currently undertaking a
full business review to ensure we are fully leveraging the
opportunities available to us and that we are positioned as
positively as possible for future growth and profitability.
Whilst the Group has been open-minded about potential strategic
opportunities to date, the quality of potential acquisitions
available that could deliver incremental value has been mixed and
the desire to look at international expansion is limited in the
short to medium term. The business is therefore focussing resources
on delivering growth opportunities in the domestic market,
utilising its core competencies and infrastructure to drive
performance over the coming three years.
Further work is being done in this area and we look forward to
providing more detail on these plans later in H2 2023.
FINANCIAL REVIEW
Revenue
Group revenue of GBP33.6m reflected a reduction of 17%
year-on-year (H1 2022: GBP40.6m). Revenue performance was impacted
by the one-off issues referenced earlier in the report. WineBank
revenue was the least impacted by these issues, down 10.8%
year-on-year, and remains 65% higher than H1 2020. Revenue from new
customer acquisition activity was unchanged year-on-year.
Gross profit
Gross profit margin fell to 29.1% (H1 2022: 31.1%). Packaging
and delivery costs increased as a percentage of revenue by 0.8%
year-on-year, as a result of the sharp increase in fuel and energy
costs. The new structure of introductory case offers, including the
use of 6 bottle offers rolled out in H2 FY2022, led to lower new
business margins in H1 this year compared to H1 2022. Product
margins excluding packaging and delivery for D2C activity increased
to 41.1% (H1 2022: 40.4%). The index of dry goods costs (glass,
packaging, labels etc) has increased by 66% from a base in October
2021. The ability of the business to configure cases has enabled it
to offset a large part of these inflationary pressures.
Exceptional one-off expenses
Due to operational issues following the launch of the new WMS
system, the business incurred additional one-off expenses relating
to the requirement for extra temporary labour, third party IT
support and additional storage costs of GBP616k (H1 2022: GBP0).
These have been disclosed separately due to their scale and one-off
nature.
EBITDA
Underlying EBITDA before the exceptional expenses highlighted
above was GBP1.4m, down from GBP3.9m in H1 2022.
Profit before tax
Profit before tax was GBP0.1m (H1 2022: GBP3.2m).
Share based payments
The Group provided for a share-based payment expense of GBP89k
(H1 2022: GBP177k) relating to the share based long-term incentive
plan for the leadership team.
Finance income
Finance income of GBP52k (H1 2022: GBP0k) relates to bank
interest earned on cash balances.
Finance expenses
Finance expenses of GBP89k (H1 2022: GBP70k) 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 decreased to 0.1p from 4.6p in H1 2022 due to
the fall in operating profit.
Dividend
The Board is not recommending the payment of an interim
dividend, but it will keep the Group's dividend policy under
review.
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
As a result of the lower than planned sales volumes in H1,
inventory levels increased by GBP2.4m from June 2022 to GBP11m. By
slowing down replenishment activity in H2, inventory levels will
drop back to the normal range by the end of FY2023.
Cash
The Group monitors net cash after deducting WineBank customer
deposits. The cash in hand excluding WineBank deposits at 31
December 2022 was GBP7.6m, compared to GBP7.7m at the previous year
end. The extra working capital invested in stock will reverse out
during H2.
Jay Wright
Chief Executive Officer
14 March 2023
Condensed consolidated statement of comprehensive income
for the period ended 31 December 2022
Unaudited Unaudited
31 December 31 December
Note 2022 2021
GBP'000 GBP'000
Revenue 33,627 40,609
Cost of sales (23,853) (27,979)
----------- -----------
Gross profit 9,774 12,630
Operating expenses (9,647) (9,401)
----------- -----------
Operating profit 3 127 3,229
----------- -----------
Finance income 5 52 -
Finance costs 6 (89) (70)
----------- -----------
Profit before taxation 90 3,159
Taxation (17) (608)
----------- -----------
Profit for the financial period and total comprehensive
income 73 2,551
=========== ===========
Basic earnings per share (pence) 7 0.1 4.6
=========== ===========
Diluted earnings per share (pence) 7 0.1 4.6
=========== ===========
Condensed consolidated statement of financial position
as at 31 December 2022
Unaudited Unaudited Audited
31 December 31 December 1 July
2022 2021
Note 2022
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Intangible assets 8 11,424 11,027 11,113
Property, plant and equipment 9 487 288 400
Right of use assets 10 3,007 2,656 3,262
Deferred tax asset 411 492 428
----------- ----------- --------
Total Non-current assets 15,329 14,463 15,203
Current assets
Inventories 11,046 10,176 8,653
Trade and other receivables 11 2,484 1,930 2,477
Derivative financial instruments 26 16 16
Cash and cash equivalents 14,128 18,799 15,070
----------- ----------- --------
Total current assets 27,684 30,921 26,216
----------- ----------- --------
Total assets 43,013 45,384 41,419
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables 12 (17,074) (21,754) (15,451)
Lease liability (527) (506) (456)
Total current liabilities (17,601) (22,260) (15,907)
Non-current liabilities
Provisions (313) (267) (290)
Lease liability (2,864) (2,502) (3,149)
----------- ----------- --------
Total non-current liabilities (3,177) (2,769) (3,439)
----------- ----------- --------
Total liabilities (20778) (25,029) (19,346)
----------- ----------- --------
Net assets 22,235 20,355 22,073
=========== =========== ========
Equity
Share capital 13 558 558 558
Share premium 11,989 11,989 11,989
Own share reserve (36) (36) (36)
Merger reserve 65 65 65
Other reserve 184 177 95
Retained earnings 9,475 7,602 9,402
----------- ----------- --------
Total Equity 22,235 20,355 22,073
=========== =========== ========
Condensed consolidated statement of changes in equity
for the period ended 31 December 2022
Called up Own Total
share Share share Merger Other Retained Shareholders'
capital premium reserve reserve reserve earnings funds
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
3 July 2021 558 11,989 (36) 65 - 5,051 17,627
Profit for the financial
year - - - - - 2,551 2,551
Share-based payments - - - - 177 - 177
31 December 2021 unaudited 558 11,989 (36) 65 177 7,602 8,924
2 July 2022 558 11,989 (36) 65 95 9,402 17,627
Profit for the financial
year - - - - - 73 73
Share-based payments - - - - 89 - 89
31 December 2022 unaudited 558 11,989 (36) 65 184 9,475 22,235
Condensed consolidated statement of cash flows
for the period ended 31 December 2022
Unaudited Unaudited
31 December 31 December
2022 2021
GBP'000 GBP'000
Cash flows from operating activities
Profit before taxation 90 3,159
Adjustments for:
Depreciation and amortisation 573 464
Net finance costs 37 70
Share-based payment 89 177
Decrease/(increase) in trade and other receivables (17) (394)
Increase in inventories (2,393) (2,938)
(Decrease)/increase in trade and other payables 1,647 3,426
Net cash (used in)/generated from operating activities 26 3,964
Cash flows from investing activities
Interest received 52 -
Purchase of intangible and tangible fixed assets (716) (561)
Net cash used in investing activities (664) (561)
Cash flows from financing activities
Payment of lease liabilities (215) (194)
Payment of lease interest (89) (70)
Net cash used in financing activities (304) (264)
Net (decrease)/increase in cash and cash equivalents 942 3,139
Cash and cash equivalents at beginning of period 15,070 15,660
Cash and cash equivalents at end of period(1) 14,128 18,799
942 3,139
(1) Cash and cash equivalents include Group cash and Wine Bank customer deposits.
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 unaudited 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 52 week period ended 1 July 2022. 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.
New standards, interpretations and amendments issued not yet effective
There are a number of standards, amendments to standards, and interpretations which have been
issued by the EU that are effective in future accounting periods that the group has decided
not to adopt early.
The following standards were in issue but have not come into effect:
Amendments to
* IFRS 17 and IFRS 4, 'Insurance contracts', deferral
of IFRS 9, as amended in June 2020 - effective for
the year ending 30 June 2024
* IAS 1, Presentation of financial statements' on
classification of liabilities - effective for the
year ending 30 June 2024
* IAS 1, Practice statement 2 and IAS 8 (narrow scope)
- effective for the year ending 30 June 2024
* IAS 12 - deferred tax related to assets and
liabilities arising from a single transaction -
effective for the year ending 30 June 2024
* IFRS 17, 'Insurance contracts' - effective for the
year ending 30 June 2024
The Directors anticipate that the adoption of planned standards and interpretations in future
periods will not have a material impact on the financial information of the Group.
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
31 December 31 December
2022 2021
GBP'000 GBP'000
Inventory charged to cost of sales 21,416 25,419
Amortisation of intangible assets (note 7) 209 152
Depreciation of property, plant and equipment (note 8) 109 62
Depreciation of right of use asset (note 9) 255 250
Net exchange gains (including movements on fair value through profit and loss
derivatives) 8 (30)
Movement in inventory provision (35) (58)
4 Share-based payments
In the period ended 31st December 2022 the Group operated an equity-settled share-based payment
plan as described below.
The charge in the period attributed to the plan was GBP89k (2021: GBP177k).
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 GBP0.01.
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
31 December 31 December
2022 2021
Shares Shares
At 2 July 1,216,739 433,288
Granted during the period 2,366,798 783,451
Outstanding at 31 December 3,583,537 1,216,739
The Company granted its first share options on 23 June 2021. Further share options were granted
on 6 December 2021 and 6 December 2022.
The awards outstanding at 31 December 2022 have a weighted average remaining contractual life
of 2.2 years (2021: 2.5 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
31 December 31 December
2022 2021
GBP'000 GBP'000
Bank interest 52 -
Finance costs
6
Unaudited Unaudited
31 December 31 December
2022 2021
GBP'000 GBP'000
Interest payable for lease liabilities 89 70
89 70
Earnings per share
7
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
31 December 31 December
2022 2021
Earnings (GBP'000)
Profit after tax 73 2,551
Earnings for the purpose of basic earnings per share 73 2,551
Number of shares
Weighted average number of shares for the purposes of basic earnings per share 55,837,560 55,837,560
Weighted average number of shares for the purposes of diluted earnings per share 57,054,299 56,381,553
Basic earnings per ordinary share (pence) 0.1 4.6
Diluted earnings per ordinary share (pence) 0.1 4.5
8 Intangible assets
Group
Goodwill Software Total
GBP'000 GBP'000 GBP'000
Cost
At 2 July 2021 9,623 2,188 11,811
Additions - 337 337
31 December 2021 unaudited 9,623 2,525 12,148
At 1 July 2022 9,623 2,781 12,404
Additions - 520 520
31 December 2022 unaudited 9,623 3,301 12,924
Accumulated amortisation and impairment
At 2 July 2021 - 969 969
Amortisation charge - 152 152
31 December 2020 unaudited - 1,121 1,121
At 1 July 2022 - 1,291 1,291
Amortisation charge - 209 209
31 December 2021 unaudited - 1,500 1,500
Net book value
At 31 December 2022 unaudited 9,623 1,801 11,424
At 1 July 2022 audited 9,623 1,490 11,113
At 31 December 2021 unaudited 9,623 1,404 11,027
9 Property, plant and equipment
Computer
hardware &
Leasehold property warehouse Fixtures
equipment & Total
fittings
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 2 July 2021 20 631 277 928
Additions - 117 70 187
31 December 2021 unaudited 20 748 347 1,115
At 1 July 2022 20 899 385 1,304
Additions - 71 125 196
31 December 2021 unaudited 20 970 510 1,500
Accumulated depreciation
At 2 July 2021 20 516 229 765
Charge for the year - 45 17 62
31 December 2021 unaudited 20 561 246 827
At 1 July 2022 20 612 272 904
Charge for the period - 63 46 109
31 December 2022 unaudited 20 675 318 1,013
Net book value
At 31 December 2022 unaudited - 295 192 487
=================================== ==================== =========== ========== =======
At 1 July 2022 audited - 287 113 400
=================================== ==================== =========== ========== =======
At 31 December 2021 unaudited - 187 101 288
=================================== ==================== =========== ========== =======
Depreciation is charged to operating expenses in the
profit and loss account.
10 Right of use assets
Computer hardware
&
Cost Leasehold property warehouse
GBP'000 equipment Total
GBP'000 GBP'000
At 2 July 2021 4,202 104 4,306
Additions - 39 39
31 December 2021 unaudited 4,202 143 4,345
At 1 July 2022 5,060 143 5,203
Additions - - -
-------------------------------- ------------------ ---------- ---------
31 December 2021 unaudited 5,060 143 5,203
Accumulated depreciation
At 2 July 2021 1,415 24 1,439
Charge for the period 238 12 250
------------------------------------ ------------------ ---------- ---------
31 December 2021 unaudited 1,653 36 1,689
At 1 July 2022 1,891 50 1,941
Charge for the period 241 14 255
------------------------------------ ------------------ ---------- ---------
31 December 2022 unaudited 2,132 64 2,196
Net book value
At 31 December 2022 unaudited 2,928 79 3,007
==================================== ================== ========== =========
At 1 July 2022 audited 3,169 93 3,262
==================================== ================== ========== =========
At 31 December 2021 unaudited 2,549 107 2,656
==================================== ================== ========== =========
Notes to the interim financial information
for the period ended 31 December 2022
11 Trade and other receivables
Unaudited Unaudited
31 December 31 December
2022 2021
Amounts falling due within one year: GBP'000 GBP'000
Trade receivables 1,562 1,105
Contract assets 922 915
2,484 1,930
============ ============
12 Trade and other
payables
Unaudited Unaudited
31 December 31 December
2022 2021
GBP'000 GBP'000
Trade payables 4,674 5,112
Taxation and social security 3,440 6,952
Contract liabilities 6,734 5,780
Accruals and other creditors 2,226 3,910
17,074 21,754
============ ============
13 Share capital Unaudited Unaudited
31 December 31 December
2022 2021
Authorised, Allotted, called up and fully GBP'000 GBP'000
paid
55,837,560 (2020: 15,687,291) ordinary shares
of GBP0.01 each 558 558
558 558
============= =============
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR FLFLTVIIVLIV
(END) Dow Jones Newswires
March 14, 2023 03:00 ET (07:00 GMT)
Virgin Wines Uk (LSE:VINO)
Historical Stock Chart
Von Dez 2024 bis Jan 2025
Virgin Wines Uk (LSE:VINO)
Historical Stock Chart
Von Jan 2024 bis Jan 2025
