Online wine retailer Naked Wines has released its performance review for the first half of the year, revealing a 15% drop in sales to £112.3 million. Despite this decline, management asserts that the company is in a stronger financial and strategic position.
In results covering the 26 weeks ending 30 September 2024, Naked Wines reported an adjusted EBIT loss of £3.1 million, a significant decrease from a profit of £5.3 million in the same period last year. However, the company noted that early peak season trading has been “solid,” with liquidity and cash flow showing improvement. These results align with the company’s previous guidance for the fiscal year 2025.
The statutory loss before tax stood at £5.6 million, an improvement from a loss of £9.7 million in the first half of the previous year. Liquidity also increased to £22.9 million, up from £20.1 million year-over-year, slightly exceeding the Group’s treasury policy target, partly due to stock reduction efforts.
CEO Rodrigo Maza, who took the helm in February after serving as UK managing director, expressed confidence in the company’s direction. He emphasized the “robust financial foundations” and the loyalty of Naked Wines’ customer base. “Our strategic initiatives focused on customer acquisition and retention are yielding positive insights, and we are currently seeing solid trading during the peak season,” Maza stated.
A performance review is currently underway to explore options for maximizing shareholder value, with a report expected at the end of the financial year. Maza also welcomed new CFO Dominic Neary, who joined in November from Mind Gym, and expressed eagerness to work together to prioritize cash flow, profitability, and growth.
Despite a 12% decline in active members (those with Angel or Wine Genie memberships) over the past year, the company reported a two-percentage-point increase in the retention of its core members—customers who have been with Naked Wines for two years or more—bringing the retention rate to 79%. Additionally, the likelihood of customers recommending the company to friends, measured by the net promoter score, rose from 73 to 76 in the last quarter.
In August, Naked Wines reported a pre-tax loss of £16.3 million for the fiscal year ending 1 April 2024, up from £15 million the previous year, with total sales down 18% to £290 million. Repeat business also fell by a quarter compared to the previous year, totaling £65 million. Despite these challenges, founder Rowan Gormley insisted that the company was making “real progress” in its turnaround efforts.
This follows the appointment of debt advisors in March 2024 to explore refinancing options and assess potential restructuring after Naked Wines’ share value dropped nearly a third over the past year.
In December 2023, Gormley increased his stake in the company by purchasing £7,700 worth of shares, marking his second investment round after he and other senior board members bought significant amounts of stock in early November. This followed a decline in share value after the company revised its full-year revenue expectations downward to a range of -12% to -16%. At that time, three of the leading team members collectively invested £75,000 in the company’s stock.
Related Topics:
