Online wine retailer Virgin Wines UK has reported revenue and profits growth for the six months to December 29.

The company said in a trading update this morning that total revenue in H1 2024 was £34.3 million – up 2% on the same period a year prior. Sales to repeat customers were up around 5%, while commercial sales rose 6.5%. Virgin reported a 22% increase in the new customer conversion rate, and a decrease of 14% on the cost per acquisition.

Meanwhile, the company reported a boost to profits, with EBITDA up 122% to £1.75 million.

“We are pleased with our performance through the first half of our financial year, particularly our strong profitability despite the challenging trading environment, with EBITDA representing over 5% of revenue,” said CEO Jay Wright.

“Following operational challenges last year, we made significant improvements in our warehouse operations, achieving a planned reduction in fulfillment costs, while maintaining an excellent next day delivery service throughout the busy peak trading period. We have remained debt free and cash generative, holding £17.4m of gross cash and £11.0m of net cash whilst reducing our inventory levels by 24% year-on-year.”

Wright said that while new customer acquisition remains challenging, the group has maintained a “disciplined approach”. He said Virgin’s new Warehouse Wines value offering, which launched in late October, has had an encouraging initial response.

“We go into the second half encouraged by our performance and in line with the key drivers behind our business model, whilst remaining mindful of the challenging consumer landscape.”  

Looking forward, the board remains confident that Virgin’s 2024 performance will be in line with expectations.

Full-year 2023 results were impacted by macroeconomic headwinds as well as the implementation of a new warehousing system.