REG - Naked Wines PLC - Trading Statement

Naked WinesAnnouncement

18/01/2024 07:00

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RNS Number : 0649A  Naked Wines PLC  18 January 2024

 

 

18 January 2024

 

Naked Wines plc

 

("Naked Wines" or "Group")

 

Peak trading in line with expectations, £7m SG&A reduction announced

 

Trading over Q3, the peak quarter for the business, has been in line with the
company's expectations:

 

●    Constant currency sales -10% versus prior year, in line with
expectations, showing an improving trend from -18% during H124

○    Average repeat customer base 12% smaller

○    Sales per repeat customer 2% higher

 

●    New customers acquired +35% on prior year with 70% increase in new
customer investment

○    YTD forecast payback at 1.4x remaining broadly in line with H1 trend
as we continue to balance scale and cashflow with investment economics

 

●    Q3 Adj EBIT expected to be £3-5m, consistent with expectations

 

●    Stabilisation of Q3 closing net cash position year on year at £3m
(Q3 FY23: £4m). Total liquidity available of £45m

 

The Group is delivering on key initiatives including the execution of further
SG&A and inventory reductions as indicated alongside half year reporting:

 

●    Cost saving actions taken this month to reduce annual run rate of
SG&A (excluding adjusted items) by a further £7m to £30-33m in FY25
(FY24 guidance £37-40m)

○    One-off cash costs of c.£3m to execute to be reported as an
adjusted item in FY24

 

●    Closing Q3 inventory levels of £163m vs £173m at end Q3 FY23

 

Rowan Gormley, Executive Chairman, said:

 

"I'm delighted with how the team pulled together to deliver a well-executed
peak trading season. As we saw at the half year, the reason sales are down on
prior year is entirely due to a smaller repeat customer base reflecting lower
investment in customer recruitment in the previous year. But for the first
time we are seeing signs of new customer acquisition coming back to life which
should support further improvement in the top line trend. We have also seen a
stabilisation in net cash levels year on year and continue to expect cash
generation in the second half of FY25.

 

Notwithstanding this, we have to recognise that we are a smaller company post
Covid and our cost base has to reflect this. We have therefore taken the
painful but necessary decision to reduce SG&A costs by £7m per year,
securing our profit potential. Sadly this means that we will be losing a
number of valued colleagues who have been informed of our plans. Reflecting
this change across all levels of the organisation we have decided to reduce
the size of the board and would like to thank Melanie Allen for her service to
the Company as a Non-Executive Director.

 

I remain committed to building a leaner and stronger Naked as we continue to
address the challenging revenue trends. I'd like to thank the team, our
suppliers and our shareholders for their patience and support as we continue
to drive these changes."

 

 

For further information, please contact:

 

 Naked Wines plc                                                                                                                                            IR@nakedwines.com

 Rowan Gormley, Executive Chairman

 James Crawford, Chief Financial Officer

 Clara Melia / Catherine
 Miles

 Investec (NOMAD & Joint Broker)                                                                                                                            Tel: 0207 597 5970

 David Flin / Ben
 Farrow

 Jefferies (Joint Broker)                                                                                                                                   Tel: 0207 029 8000

 Ed Matthews / Gill
 O'Driscoll

 Instinctif (Financial PR)                                                                                                                                  Tel: 07917 178 920 / 07931 598 593

 Guy Scarborough / Damian
 Reece

 

About Naked Wines plc

 

Naked Wines connects everyday wine drinkers with the world's best independent
winemakers.

 

Why? Because we think it's a better deal for everyone. Talented winemakers get
the support, funding and freedom they need to make the best wine they've ever
made. The wine drinkers who support them get much better wine at much better
prices than traditional retail.

 

It's a unique business model. Naked Wines customers (who we call Angels)
commit to a fixed prepayment each month which goes towards their next
purchase. In turn. Naked funds the production costs for winemakers, generating
savings that are passed back to its customers. It creates a virtuous circle
that benefits both wine drinker and winemaker.

 

Our mission is to change the way the whole wine industry works for the better.
In the last financial year we served more than 792,000 Angels in the US, UK
and Australia, making us a leading player in the fast-growing
direct-to-consumer wine market.

 

Our customers have direct access to 293 of the world's best independent
winemakers making over 2,000 quality wines in 22 different countries. We
collaborate with some of the world's best independent winemakers like Matt
Parish (Beringer, Stags' Leap) and eight-time Winemaker of the Year Daryl
Groom (Penfolds Grange).

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