Naked Wines PLC (AIM:WINE, OTCQX:NWINF) has announced its third-quarter results, which are in line with the company’s expectations. The online wine retailer witnessed a 10% year-on-year decline in constant currency sales during this period, marking a significant improvement from the 18% dip experienced in the first half of the financial year.
One of the key highlights from the update is the remarkable 35% increase in new customers acquired. This substantial leap in customer acquisition was supported by a 70% rise in investment dedicated to attracting new buyers. The surge in new customers not only demonstrates the company’s effective recruitment efforts but also hints at the potential for future growth.
While the average repeat customer base slightly declined by 12%, there was a positive development in sales per repeat customer, which witnessed a 2% uptick. This indicates that Naked Wines continues to engage and retain its existing customer base effectively, despite some challenges.
Financially, the company anticipates its third-quarter adjusted EBIT to fall within the range of £3-5 million. Moreover, Naked Wines expects the company’s closing net cash position to stabilize at £3 million, with a substantial liquidity buffer of £45 million. This demonstrates the company’s strong financial footing and its ability to weather uncertainties in the market.
To further strengthen its profit potential, Naked Wines has initiated cost-saving measures, aiming to reduce its annual selling, general, and administrative expenses by £7 million by the end of 2025. While this strategic move will incur a one-off cash cost of £3 million, it is expected to position the company for long-term success.
Naked Wines’ executive chairman, Rowan Gormley, expressed his satisfaction with the team’s efforts during the peak trading season. He also acknowledged the necessity of adapting the cost base to reflect the company’s size after the impact of the COVID-19 pandemic. As part of the cost-saving measures, the company has decided to reduce its workforce, resulting in the departure of Melanie Allen as a non-executive director.
Gormley remains committed to building a leaner and stronger Naked Wines as they navigate the challenging revenue trends. He expressed gratitude towards the team, suppliers, and shareholders for their patience and support throughout this transformative phase. With a focus on new customer acquisition and optimizing operations, Naked Wines aims to position itself for sustained growth in the future.
Q: What were Naked Wines’ third-quarter results?
A: Naked Wines announced a 10% year-on-year decline in constant currency sales during the third quarter, which is an improvement compared to the 18% dip in the first half of the financial year.
Q: What is the significant highlight from the update?
A: The remarkable highlight is the 35% increase in new customers acquired by Naked Wines during this period.
Q: How was Naked Wines able to acquire more new customers?
A: Naked Wines increased its investment in attracting new buyers by 70%, which supported the substantial leap in customer acquisition.
Q: What was the change in the average repeat customer base for Naked Wines?
A: The average repeat customer base slightly declined by 12%.
Q: Was there any positive development with sales per repeat customer?
A: Yes, sales per repeat customer witnessed a 2% uptick, indicating that Naked Wines is effectively engaging and retaining its existing customer base.
Q: What is the anticipated adjusted EBIT for Naked Wines’ third quarter?
A: Naked Wines expects its third-quarter adjusted EBIT to fall within the range of £3-5 million.
Q: What is Naked Wines’ closing net cash position?
A: Naked Wines expects its closing net cash position to stabilize at £3 million, with a liquidity buffer of £45 million.
Q: What cost-saving measures has Naked Wines initiated?
A: Naked Wines has initiated cost-saving measures to reduce its annual selling, general, and administrative expenses by £7 million by the end of 2025.
Q: What is the expected cash cost of the cost-saving measures?
A: The cost-saving measures will incur a one-off cash cost of £3 million.
Q: Who has departed from Naked Wines as a result of the cost-saving measures?
A: Melanie Allen has departed from Naked Wines as a non-executive director.
Q: What is the goal of Naked Wines going forward?
A: Naked Wines aims to position itself for sustained growth by focusing on new customer acquisition and optimizing operations.
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