Virgin Wines UK PLC (LON:VINO) said it was investing in growth after reported profits rose and market share increased in the past year, but sales and underlying earnings fell.
It said in a cost-of-living crisis its products "represent an affordable treat compared to the cost of alternative options such as going to pubs and restaurants" and it expects the top-line performance to be "relatively resilient" and "broadly flat" for the new year.
Trading was positive in August but softer than anticipated in September, as marketing was paused during the national mourning for the Queen.
The direct-to-consumer wine seller reported £5.1mln of profit before tax for the year to 1 July 2022, up from £1.7mln a year ago, though if exceptional costs are excluded, profits were roughly flat.
Underlying profit (EBITDA) fell to £6.2mln from £7.0mln, on revenue down to £69.2mln from £73.6mln.
A "disciplined approach" to new customer acquisition saw 105k new customers added, with 37% growth in the fourth quarter, with just over half of new customers (53%) converting onto subscription schemes.
Its active customer base grew to 186k from 182k and its market share increased to 8.4% from 6.1%, according to IBISWorld Online Alcohol Retailing in the UK Industry Report 2022 in March.
Cash generated during the year has "largely been used to accelerate capital projects, invest in inventory to protect against supply risks and fund the growing commercial channel", the AIM-listed company said.
The shares rose initially on Wednesday morning but later fell 4.75% to 47.15p, down 77.6% for the year to date.
The results, said house broker Liberum, "highlight just how well-run Virgin Wines is".
"The customer acquisition model has proven to be disciplined, scalable and delivers profits. This, together with highly rated wines, has enabled the group to sign up some impressive new corporate partnerships which should help underpin growth in the years ahead. We cannot fathom nor understand the valuation," said analyst Wayne Brown.