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Virgin Wines UK shares plummet
Shares in online wine retailer Virgin Wines UK Plc dropped almost 23% after Christmas deliveries suffered at the hands of the Omicron variant.
In the biggest tumble since Virgin Wines went public in March 2021, its shares plunged by 23%, meaning the company’s profit and revenue has fallen below market expectations.
Staff shortages due to employees either calling in sick or self-isolating due to the Omicron variant meant that “the business had to ‘cut off’ two days earlier than planned in terms of making Christmas deliveries, in order to ensure that all customers received their orders, the company said in a statement.
The drop takes Virgin Wines’ market capitalisation down to £86.5 million pounds (US$117 million). The stock has fallen 21% since going public in March 2021.
It no doubt comes as a bitter blow for Virgin Wines CEO Jay Wright, following on from a “transformational year” for the company, which saw its revenues rise by 30% in the year to June 2021 – for the second year in a row.
Wright announced in November 2021 that it had been a “milestone” year for the Group, after it opened on the public markets and emerged in a stronger financial position.
“We are confident that Virgin Wines, underpinned by underlying, subscription-weighted growth drivers, its strong brand and unique customer proposition remains well placed to take advantage of future consumer trends,” Wright said at the time.
According to Andrew Wade, an analyst at New York-based financial insight company Jefferies, the latest shares development “will likely be taken as a negative read-across” for fellow online wine company Naked Wines Plc.
Shares in Naked Wines fell by 5.5% to its lowest since November 2020, with the company blaming the disappointing results on shortages and supply issues.
Find our detailed analysis of what this means for both companies here.
Virgin Wines was established in 2000 by Richard Branson, and bought by Direct Wines in 2005.
Jay Wright, founder of Warehouse Wines, became managing director for Virgin Wines in June 2008, and spearheaded a major restructure, including merging Warehouse Wines with Virgin Wines. In 2013, Virgin Wines bought itself back from Direct Wines to become fully independent.
Last year, the company announced its intention to join the London stock market with a listing on the AIM market. However, covid-19 and the latest omicron variant has scuppered the company’s progress.