Virgin Wines UK has reported a resilient performance for the year ending 28 June 2025, with profits ahead of expectations despite a tough market marked by rising duties, higher packaging costs and the introduction of new environmental taxes.
Revenue held steady at £59m and managed to match last year’s figure while the wider online drinks sector contracted by almost 10%. Adjusted EBITDA came in at £2.3m (FY24: £2.8m), while pre-tax profit was £1.6m, down marginally from £1.7m the previous year but exceeding market forecasts.
Gross product margins dipped to 35.6% from 37.6%, reflecting inflationary pressures and the impact of the government’s new alcohol duty structure and Extended Producer Responsibility (EPR). Virgin Wines’ balance sheet remains strong, with £17.6m in gross cash and no debt.
Chief executive Jay Wright said the year marked both the company’s 25th anniversary and a “step-change” in its long-term ambitions.
“FY25 was a milestone year for Virgin Wines, being both our 25th anniversary but also the year we announced our medium-term growth strategy. We delivered a resilient performance, with revenue in-line with the prior year against a market that contracted and with profits ahead of expectations, despite a challenging consumer backdrop and significant cost pressures,” he said.
The Norwich-based online retailer launched its medium-term growth strategy in March, targeting £100m in annual revenue and a 7% EBITDA margin. Progress is already being seen across four key growth pillars: customer acquisition, commercial partnerships, its new value-focused Warehouse Wines venture and digital innovation.
Customer acquisition rose 28% year-on-year, achieved with only a 6% increase in marketing spend. Conversion rates for new customers remained strong at over 40%. Meanwhile, the company’s flagship subscription scheme, WineBank, grew membership by 1.5% to 128,000, with cancellations falling to 14.7%.
The commercial partnerships channel delivered a 24% rise in revenue, bolstered by expanding relationships with Ocado, Moonpig and train operators including LNER, Avanti and GWR, alongside new placements in WHSmith Travel stores.
Elsewhere, Warehouse Wines, Virgin’s DTC value proposition launched in 2024, recorded £1.8m in its first full year, with revenue up 484% year-on-year.
The business continues to invest in efficiency, cutting pick-and-pack costs by 3% and achieving a 17% saving in customer service operations. Development of a Virgin Wines mobile app remains on track for release in H2 2026, with an internal review underway to explore the use of AI to streamline operations.
Chairman John Risman praised the company’s progress amid a “complex operating environment” and said its position as the “lowest cost-to-serve operator in the sector” had enabled it to maintain margins and capture market share.
Trading in the first quarter of FY26 has remained in line with expectations, with early signs of continued growth. Customer acquisition is up 29% and Warehouse Wines revenue is up 134% year-on-year.
Wright added: “With a resilient and loyal customer base, a growing range of propositions and exciting initiatives such as our app launch, we remain confident in meeting expectations for FY26.”
Virgin Wines was founded in 2000 and has been listed on the London Stock Exchange’s Alternative Investment Market (AIM) since 2021. It sells over 650 wines to 145,000 active customers.
