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Naked Wines claims to be in ‘better position’ despite falling sales
Online retailer Naked Wines has issued a performance review after revealing that sales fell 15% in the first half of the year to £112.3 million, although the management insists it is in “a better position, both financially and strategically”.
Results for the 26 weeks to 30 September 2024 released today showed the adjusted EBIT was down on the previous year, at -£3.1m, down from £5.3m, however the company noted that early peak season trading had been “solid” with liquidity and cash continuing to improve, and the performance was in line with previous guidance for the FY25.
The statutory loss before tax was reported as £5.6m, compared to last year’s first half loss of £9.7m, while liquidity had also improved to £22.9m, up from £20.1m in the same period the previous year. It is now slightly ahead of the Group’s treasury policy target which comes partly as a result of stock reduction, the company said.
Rodrigo Maza, who was appointed CEO in February having joined the company as UK managing director in September 2023, said the company was in a better position, both financially and strategically with “robust financial foundations” and members who remained loyal and engaged.
“Our strategic initiatives centred around customer acquisition and retention are generating learnings, and we are currently experiencing solid trading during the peak season period,” he said.
It also noted that a performance review is underway, in order to “proactively evaluate options to maximise shareholder value”. A report will be issued at the end of the financial year. He also welcomed new CFO Dominic Neary, who joined Naked Wines in November from Mind Gym, saying he looked forward to working with him “as we focus the business on cash, profitability and growth.”
A performance review is currently underway, in order to “proactively evaluate options to maximise shareholder value”, the results said, with a report likely to be issued at the end of the financial year.
It also noted that it had continued to sell its surplus inventory, with the UK and Australia back normal inventory levels, although US inventories were still “significantly” in excess, despite being down £20.5m on HY24. It said it was “currently investigating options to reduce inventory levels more quickly”, which would help drive improved cash over the next two financial years, but “but could lead to increased liquidation costs, and result in EBIT at the lower end of guidance”.
Although active members (those with Angel or Wine Genie membership) in last 12 months fell 12%, in the six-month period, the statement said retention of its ‘core’ members (those who had been customers for two years or more) was up two percentage points to 79%, and they remained “highly engaged”. Customers also increasing their overall likelihood to recommend the company to a friend (net promoter score) up from 73 to 76 in the last quarter, it noted.
Falling share value
In August, the company reported a pre-tax loss of £16.3m for the 12 months to 1 April 2024 up on £15 million on the 2022/2023 financial year, with sales down 18% to £290 million and repeat business also a quarter on the previous year to to £65 million. However founder Rowan Gormley claimed that the company was “making real progress in turning things around” .
It followed the appointment of debt advisors in March 2024, to explore refinancing options and assess a possible restructuring of the wine company following the value of Naked shares plummeting by nearly a third over the last 12 months.
In December 2023, Gormley significantly upped his stake in the firm by snapping up £7,700 worth of shares in the firm. This was the second round of shares Gormley bought, after he and other senior board members bought a significant numbers in early November following a fall in the value of share after the company announced it was reducing its revenue expectations for full-year to -12% to -16%. Three of the then leading team members collectively invested £75,000 in the company’s stock at the time.
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Naked Wines reports £16.3m loss — but claims 'real progress'