Business
Trading Statement
Trading Statement.
About this update from Virgin Wines Uk Plc
[{"type":"text","content":"\n\n\n \n \n \n\n\n04 May 2023\n \nTrading Statement\n(\"Virgin Wines\", the \"Company\" or the \"Group\")\nVirgin Wines UK plc (AIM: VINO), one of the UK's largest direct-to-consumer online wine retailers, today provides an update on its recent trading and strategic progress.\nKey highlights\nWarehouse Management System\n- Significant progress has been made in remedying the stability and software operational issues that previously affected the implementation of the new Warehouse Management System (WMS), which, as previously reported, negatively affected H1 revenue and profit.\n \n- The Board is confident that these one-off issues are in the past, and the system is now working efficiently and driving increased productivity in the operational environment.\n \n- This positive progress can be seen with the April cost per case for warehouse fulfilment being in line with April 2022 levels*.\nCash\n- The working capital position continues to be strengthened, with a reduction in stock holding of £1.2m (10%) since its January high point.\n \n- The Group maintains a strong cash position with £12.3m gross cash as at 28 April 2023 and no debt.\nCurrent trading\n- As previously announced, Q3 trading continued to be negatively affected by a reduction in order frequency through the key WineBank customer membership, as customers continued to build their balances rather than spend.\n \n- An increasingly competitive environment arose during Q3 as retailers discounted at aggressive levels to liquidate high stock holdings.\n \n- However, encouragingly, cancellation and conversion rates have started to improve since the end of H1, whilst the trade rate has also recovered from its low point in November 2022. \n \n- In addition, the total customer deposit balance in WineBank continues to build.\n \n- Q4 revenue is expected to be in line with Q422 following a marginally positive YOY variance in April 2023 and improved order frequency.\nStrategic progress\nDelivering on the core pillars that have enabled the Group to generate growth and profit consistently for many years remains critica...