Virgin Wines Uk Plc · LSE:VINO
Virgin Wines Uk — H1 2024 Earnings Presentation
29 slides from Virgin Wines Uk's earnings presentation, Mar 25, 2024
Slide 1: FY 2024 Interim Results
FY 2024 Interim Results Results for the 26 weeks to 29th December 2023
Slide 2: Contents
2. Virgin Wines FY 2024 Interim Results Contents 3 - Strategic aims for FY 2024 6 - Revenue and profit summary 7 - Margin and costs summary 10 - Cash summary 11 - Operational efficiency 12 - Inventory summary 13 - Customer acquisition 14 - Existing customer base 16 - Commercial and gift 17 - Wine bu
Slide 3: Strategic aims for FY 2024
3. Virgin Wines FY 2024 Interim Results Strategic aims for FY 2024 What have we done to deliver positive results across these key drivers: +122% 37.2% -25% -11% Disciplined approach to Drive warehouse Boost profitability gross margins efficiencies The lowest cost to serve EBITDA up 122% Product gros
Slide 4: Strategic aims for FY 2024 cont.
4. Virgin Wines FY 2024 Interim Results Strategic aims for FY 2024 cont. What have we done to deliver positive results across these key drivers: 16.8% +6.5% +22% -24% Drive loyalty and ‘stickiness’ in our key Maximise value from our Acquire high quality WineBank scheme loyal subscriber base customer
Slide 5: Strategic aims for FY 2024 cont.
5. Virgin Wines FY 2024 Interim Results Strategic aims for FY 2024 cont. What have we done to deliver positive results across these key drivers: +£3.4m Complete Brand refresh Launch our Generate increased Maximise potential of and roll out across all value proposition, levels of net cash open source
Slide 6: Revenue & profit summary
6. Virgin Wines FY 2024 Interim Results Revenue & profit summary ‣ A strong bounce back in H1 2024 with Underlying EBITDA up £965k (122%) at £1.75m, H1 2023 £790k ‣ Revenue grew by 2% to £34.3m ‣ Revenue growth was underpinned by the continued stability of the WineBank customer base with revenues up
Slide 7: Margin & costs summary
7. Virgin Wines FY 2024 Interim Results Gross margin Margin & costs 32% summary 31% 30% ‣ Improved both reported gross margins and 29% product gross margins despite the continuing 28% challenge of higher input costs and taxation 27% ‣ Reported gross margins (revenue less wine, H1 2023 FY 2023 H1 202
Slide 8: Margin & costs summary cont.
8. Virgin Wines FY 2024 Interim Results Margin & costs summary cont. How has this been achieved ‣ Using the flexibility of our open source wine buying model to source wines and dry goods to offset the impact of cost pressures ‣ Disciplined approach from channel owners curating case content to delive
Slide 9: Margin & costs summary cont. - The Future
9. Virgin Wines FY 2024 Interim Results Margin & costs summary cont. The Future ‣ Switch where possible to lower ABV wines to take advantage of lower duty rates ‣ The March budget confirmed no further changes to UK duty rates until February 2025 at the earliest. Continue to campaign with WSTA to cha
Slide 10: Cash summary
10. Virgin Wines FY 2024 Interim Results Cash summary ‣ Gross cash including Wine Bank deposits £17.4m (H1 2023: £14.1m) ‣ Cash net of customer WineBank deposits increased by £3.4m to £11.0m (H1 2023: £7.6m) ‣ The business remains debt free ‣ The Group continues to maintain our longstanding policy o
Slide 11: Operational efficiency
11. Virgin Wines FY 2024 Interim Results Operational efficiency Low cost to serve and maintaining high customer service levels are a key pillar of our business model. Fulfilment costs Service and quality Customer promise ‣ Fulfilment cost per case fell by ‣ Wine rating – average customer ‣ Our no qu
Slide 12: Inventory summary
12. Virgin Wines FY 2024 Interim Results Inventory summary ‣ With the background of supply chain issues declining the Team are focused on reducing inventory while maintaining availability of all core products ‣ Inventory level has fallen by £2.6m (24%) to £8.4m from £11.0m at the end of H1 2023 ‣ Ro
Slide 13: A pragmatic approach to customer acquisition
13. Virgin Wines FY 2024 Interim Results Conversion: Total WineBank Costs: CPR Full costed A pragmatic 60% £25 approach to 55% £20 50% £15 customer 45% £10 40% £5 acquisition 35% - FY 2022 H1 2023 FY 2023 H1 2024 H1 2020 H1 2021 H1 2022 H1 2023 H1 2024 Our customer acquisition model ‣ It has been es
Slide 14: A loyal and active customer base driven by WineBank
14. Virgin Wines FY 2024 Interim Results Retention rates: Sales Customer A loyal and active customer base 120% 110% 100% driven by our WineBank 90% 80% subscription scheme 70% FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 WineBank deposits: ‣ The customer base is made up from members of our two subscripti
Slide 15: A loyal and active customer base cont.
15. Virgin Wines FY 2024 Interim Results A loyal and active customer base driven by our WineBank WineBank cancellations: 18% subscription scheme cont. - 17% - ‣ Most significantly the cancellation rate on WineBank has fallen every month for 16% the past year and now sits at 16.8% per annum, down fro
Slide 16: Continued growth in both the Commercial & Gift channels
16. Virgin Wines FY 2024 Interim Results Continued growth in both the Commercial & Gift channels ‣ Commercial revenue increased by 6% YOY driven by increased sales of corporate gifts over the festive season ‣ A more challenging sales environment with our retail partners ‣ We are pleased to have rene
Slide 17: Benefitting from our flexible open-source wine buying model
17. Virgin Wines FY 2024 Interim Results Benefitting from our flexible open-source wine buying model ‣ Increased costs continue to add pressure to the price of wine with glass, packaging, bottling and freight above historic norms but easing from their high point ‣ Most significant factor regarding p
Slide 18: Successful completion of our brand refresh
18. Virgin Wines FY 2024 Interim Results Successful completion of our brand refresh ‣ Brand refresh project completed with new brand guidelines in place ‣ Objective to deliver a more premium look and feel to Virgin Wines - more aspirational ‣ More wine related and lifestyle imagery to be incorporate
Slide 19: Encouraging start to Warehouse Wines
19. Virgin Wines FY 2024 Interim Results Encouraging start to Warehouse Wines ‣ Key new initiative for H1 2024 was to launch a new value proposition called Warehouse Wines ‣ Aimed at the supermarket wine enthusiast keen on everyday low prices ‣ Launched with circa 60 wines, the vast majority priced
Slide 20: Five O'Clock Somewhere Wine Club
20. Virgin Wines FY 2024 Interim Results Five O’clock Somewhere Wine Club ‣ 5OS Wine Club will be an exclusive, limited member club offering outstanding, boutique wines handcrafted in tiny quantities ‣ Label artwork is exclusively crafted for the bottles in the range ‣ Wines available to 5OS members
Slide 21: Vineyard Collection
21. Virgin Wines FY 2024 Interim Results Vineyard Collection ‣ Vineyard Collection is a concept to create wines from Virgin Wines own select vineyard plots across the world ‣ Working with our most trusted winemakers to allow us access to ‘our own’ rows of vines ‣ The first wine produced is an Englis
Slide 22: Outlook: Trading conditions remain challenging, but we remain on course
22. Virgin Wines FY 2024 Interim Results Outlook: Trading conditions remain challenging, but we remain on course There have been many areas where have made progress over the past year. Operational Cash Profit Revenue Inventory Gross margin efficiency generation New customer Customer Commercial Gift
Slide 23: Outlook: Cost reduction plan
23. Virgin Wines FY 2024 Interim Results Outlook: Cost reduction plan ‣ In what remains a challenging market there is no room for complacency ‣ Our key focus is to maximise the net contribution from every transaction and focus spend on growth initiatives. Ensuring the Group cost base reflects the cu
Slide 24: Outlook: Capital allocation
24. Virgin Wines FY 2024 Interim Results Outlook: Capital allocation With our strong balance sheet, no debt and growing free cash the Group Board is fully focused on Capital Allocation and how to drive shareholder value from a number of potential initiatives. ‣ Increasing investment in new customer
Slide 25: Appendices with financial tables
25. Virgin Wines FY 2024 Interim Results Appendices with financial tables
Slide 26: Results summary
26. Virgin Wines FY 2024 Interim Results Results Unaudited Unaudited 29 Dec 2023 31 Dec 2022 summary £’000s £’000s Revenue 34,286 33,627 Underlying EBITDA excludes share Gross profit 10,654 9,774 based paymaents Gross profit % 31.1% 29.1% Underlying operating expenses (8,899) (8,984) Underlying EBIT
Slide 27: Group income statement
27. Virgin Wines FY 2024 Interim Results Group income Unaudited Unaudited 29 Dec 2023 31 Dec 2022 statement £’000s £’000s Revenue 34,286 33,627 Cost of sales (23,632) (23,853) Gross profit 10,654 9,774 Operating expenses (9,678) (9,647) Operating profit 976 127 Finance income 161 52 Finance costs (8
Slide 28: Group balance sheet
28. Virgin Wines FY 2024 Interim Results Unaudited Unaudited Audited 29 Dec 2023 31 Dec 2022 30 June 2023 Group balance £’000s £’000s £’000s Assets sheet Non-current assets Intangible assets 11,145 11,424 11,350 Property, plant and equipment 306 487 402 Right of use assets 2,620 3,007 2,870 Deferred
Slide 29: Group cash flow
29. Virgin Wines FY 2024 Interim Results Group cash flow Unaudited 29 Dec 2023 £’000s Unaudited 31 Dec 2022 £’000s Cash flows from operating activities Profit before taxation 1,057 90 Adjustments for: Depreciation and amortisation 642 573 Net finance costs (81) 37 Share-based payment 137 89 Decrease