Virgin Wines shares fizz on market debut

The company floated in London on Tuesday (PR Image)

Virgin Wines

2 March 2021

Virgin Wines made a sparkling debut as its arrival on London’s junior AIM market on Tuesday was greeted with a 20% rise on its initial share price within an hour of trading.

The doorstep wine delivery firm placed 6.6 million new ordinary shares and 17.7 million existing shares at an offer price of 197p per share, in a listing netting selling shareholders nearly £35 million.

Shares soared on opening to hit a high of 232p before settling back slightly at 229.5p.

Senior management now hold just over 20% of the company. Retail traders were not invited to participate in the IPO with the shares reserved for institutional investors.

Chief executive Jay Wright said: “Our successful IPO and admission to AIM represents a significant new chapter in the group’s long-term development”.

The firm, which has around 147,000 paying subscribers and delivered more than a million cases in 2020, is among a string of online lockdown winners executing London listings after seeing demand soar during the pandemic.

Recent floats have included The Hut Group, online greetings card retailer Moonpig and auction platform ATG, while Deliveroo and Darktrace are planning multi-billion pound IPOs.

Virgin Wines floated as it emerged the Chancellor plans to shake-up stock market listings rules in a bid to help London compete with New York and Amsterdam and become the go-to place for fast-growing companies to IPO.

The Government is hoping tech floats will help drive Britain’s recovery and Rishi Sunak is now expected to publish a review written by former EU financial services commissioner Lord Jonathan Hill alongside his Budget.

London has been losing out to Amsterdam post-Brexit, which just became Europe’s largest share trading centre. The review is expected to propose changes attractive to entrepreneurs, such as the chance for founders to retain a “golden share” blocking unwanted takeovers - an idea the LSE itself has backed - and addressing the minimum level of free float.

A recently-released Government-commissioned review by former Worldpay boss, Ron Kalifa, also recommended listing reforms.

Online reviews site Trustpilot revealed on Monday that it is planning a London listing it hopes will see it valued at around £1 billion.

Founder Peter Holten Mühlmann told the Standard he picked London both for its growing tech scene and because “the London stock market has a lot of liquidity, and they are exhibiting the right long term mindset on how they are looking at operating the listing rules”. It is this sort of IPO the Chancellor wants to attract.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Positioning as an internet business, rather than simply a wine merchant, is a shrewd move by Virgin wines and mirrors Moonpig’s status as an e-commerce platform which help generate huge interest in its IPO.”

She added: “In this speculative climate, it’s even more important that investors take a deep breath, do their research, and make sure they are really happy with the long-term prospects of the company before putting in their money.’’

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