Virgin Wines UK, an online wine retailer, has announced a swing to a pretax loss in fiscal 2023, citing higher costs and lower margins. However, the company remains optimistic about sales growth in fiscal 2024.
Financial Performance and Revenue
For the year ended June 30, Virgin Wines UK reported a pretax loss of £737,000 ($896,118), compared to a profit of £5.1 million in the previous year. Revenue also experienced a decline, falling from £69.2 million to £59.0 million.
Moreover, adjusted earnings before interest, taxes, depreciation, and amortization dropped to £1.8 million from £6.2 million. Gross margins faced a decrease as well, decreasing from 31.4% to 29.6% due to inflationary pressures.
Factors Impacting Performance
The company attributed the financial performance in fiscal 2023 to various factors affecting both revenue and cost. The most significant factor was the disruption caused by the launch of the new Warehouse Management System in late first quarter.
Outlook and Expectations
Despite the challenges faced in fiscal 2023, Virgin Wines UK anticipates double-digit sales growth in fiscal 2024. They also anticipate an Ebitda margin of approximately 4% to 5% as inflationary pressures gradually ease.
Stock Performance
As of 0741 GMT, Virgin Wines UK’s stock prices were down by 2.0 pence (4.9%) at 39.0 pence.
