Let’s take a look at the latest news from Digital Wine.
The post Why the Digital Wine (ASX: DW8) share price wobbled today appeared first on The Motley Fool Australia. –
The Digital Wine Ventures Ltd (ASX: DW8) share price spent most of today in the red, despite no news having been released by the company.
However, it did announce its earnings for financial year 2021 (FY21) yesterday.
Luckily, the wine distributor’s shares recovered in the nick of time. The Digital Wine share price finished the day trading at 6.4 cents, flat with its previous close.
Let’s take a look at the latest news from Digital Wine.
Digital Wines share price flat despite posting 410% increase to income
Here’s how the wine distributor performed during FY21:
$2.6 million of revenue, 410% greater than that of FY20
Net loss after tax of $6.9 million, a 240% great loss than the company reported for the prior financial year
Gross profit of $19,414
According to the company, its net loss for FY21 was intensified by the expansion of its WINEDEPOT business and employee share options.
Over the period, Digital Wine’s assets increased by $8.3 million to reach $8.8 million worth, mostly due to a capital raise.
The company shipped 204,962 cases of wine in FY21. That’s 761% more than it did the prior financial year.
The company ended the period with $6.3 million of cash.
What happened in FY21 for Digital Wine?
It’s been a busy year for Digital Wine and its share price.
Digital Wine underwent a $6.15 million capital raising in July 2020.
The company signed up its first French winery and, in doing so, expanded its addressable market early in FY21.
It also announced it would make credit as a service available within its direct-to-trade marketplace.
Additionally, Digital Wine partnered with Earlypay Ltd (ASX: EPY) to launch a payment management system for its wholesale customers and with Zip Co Ltd (ASX: Z1P) to offer a buy now, pay later solution.
It finalised its plan to roll out a national network of temperature-controlled depots and expand its delivery fleet to ready itself for expected growth. Digital Wine later partnered with Direct Couriers to develop a dedicated delivery fleet for its wine.
It agreed to acquire Wine Delivery Australia, which Digital Wine expected to increase its customer database by 186 suppliers. Digital Wine also expanded its addressable market by providing wineries the ability to list their products across a broad range of direct-to-consumer sales channels and allowed corporate small-to-medium enterprises and registered businesses to purchase wine on a membership model.
It also partnered with Vivino, the world’s largest wine app and marketplace, and Bibendum, a fine wine and beverage distributor. Additionally, Digital Wine signed a memorandum of understanding with eBay. The company also added Amazon.com, Inc. (NASDAQ: AMZN) to the list of direct-to-customer channels serviced by Digital Wine’s WINEDEPOT DIRECT
It also allowed its shareholders to buy its products at better prices through its ‘Insider Trading’ wine club.
Finally, Digital Wine obtained official climate neutral status from Leaders for Climate Action.
What did management say?
Digital Wine’s chair, Paul Evans, commented on the results that didn’t manage to spur much excitement for the company’s share price. He said:
It has been a year of further strong growth. We have accelerated organic growth in our WINEDEPOT LOGISTICS platform…
Our sales pipeline remains strong, notwithstanding a challenging environment for many of our customers stemming from the COVID-19 pandemic, specifically the constraints on winery visitation and forced closures for on-premise operations…
The Company in a strong liquidity position and has the resources to execute its vision. We continue to consider a range of merger and acquisition opportunities. The key principles that must drive these is that they will either add value to our customer experience and/or drive efficiencies and scale in our core business.
What’s next for Digital Wine?
Here’s what those interested in the Digital Wine share price might want to keep an eye out for in FY22.
The company commented in its FY21 results that it expects to ship 1 million cases of wine in FY22. That would be a notable milestone that might have an effect on the Digital Wine share price.
Additionally, the company plans to develop WINEDEPOT’s presence in Australia and New Zealand for the time being. Though, it eventually hopes to expand into other key markets.
In the future, Digital Wine might be updating the market on launches in the United States, the United Kingdom, Canada, Europe, Hong Kong, and Singapore.
Digital Wine share price snapshot
The Digital Wine share price has gained 60% year to date. It is also, coincidently, 60% higher than it was this time last year.
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Amazon and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended eBay and has recommended the following options: long January 2022 $1,920 calls on Amazon, short January 2022 $1,940 calls on Amazon, and short October 2021 $70 calls on eBay. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.