Naked Wines’ Share Price Rallied 12.5% on Its Half-Year Results

The Naked Wines PLC (LON: WINE) share price rallied 12.5% as of 10:49 GMT after releasing its half-year results for the 26 weeks that ended on 2 October 2023. The company’s total revenue amounted to £132.3 million, reflecting a decrease of 20% at reported currency rates (18% decline at constant currency).

The online wine retailer’s adjusted earnings before interest and taxes (EBIT) stood at £2.2 million, with a loss before tax of £(9.7) million. Net cash, excluding lease liabilities, was £2.8 million, with total available liquidity reaching £48 million.

The company’s General and Administrative (G&A) costs, excluding adjusted items, were reduced by 27% (26% reduction at constant currency) to align with its reduced sales performance. Further cost-reduction measures are in the pipeline.

The firm anticipates that its inventory optimisation efforts will result in a cash inflow of £40 million to £50 million over the next 18 months.

Naked Wines’ business is progressively moving towards sustainable cash generation as it remains committed to driving sustainable profitability by reducing costs. Future inventory intake has been significantly reduced, with purchases expected to be £60 million to £70 million below the forecasted Cost of Goods Sold (COGS) by the end of FY25.

Repeat customers have been performing well, with higher revenue per customer across all markets. Cancellation rates in all markets have decreased, and the firm’s UK customer base has stabilised. Following successful initial results, the company is now scaling up the testing of its revised new customer recruitment model.

After the period ended, customer order patterns over the peak trading months aligned with its forecasts. 

Rowan Gormley, Naked Wines’ Executive Chairman, commented: “We are moving towards a period of sustained cash generation. We have taken out £3 million of cost with £10 million more to come and expect to generate £40-50 million of cash from inventory over the next 18 months. In addition, we have made good progress with testing an enhanced customer proposition to restore us to growth. I want to thank our people, our winemakers and our customers for their support and reiterate our determination to make sure that they are rewarded for it.”

Naked Wines share price. 

The Naked Wines share price rallied 12.47% to trade at 46.9p from Thursday’s closing price of 41.7p.