Naked Wines, an online wine merchant, reports a narrowing of its losses amidst a decrease in sales, thanks to strategic improvements.
- In the first half of the year, the company reduced its pre-tax loss from £9.7m to £5.6m, while facing a 15% sales decline.
- The decline in sales was accompanied by a decrease in active members by 12%, affecting overall revenues.
- The company’s adjusted EBIT suffered due to inventory liquidation costs, decreasing by £5.3m to a loss of £3.1m.
- Despite challenges, the company predicts solid trading and strategic progress for the upcoming peak season.
Naked Wines, the online wine retailer, has reported a reduction in its financial losses during the first half of the fiscal year, attributed to strategic and financial improvements despite weaker sales performance. Pre-tax losses fell to £5.6 million for the six months ending 30 September, down from £9.7 million the previous year. The company linked its progress to ongoing efforts in implementing a turnaround strategy.
The merchant witnessed a 15% drop in sales during this period, amounting to £112.3 million, correlating with a notable 12% reduction in the number of active members. This decline in customer activity has directly impacted revenue figures, presenting a significant challenge for recuperating losses.
Adjusted EBIT for the company decreased by £5.3 million to a loss of £3.1 million. This downturn was significantly influenced by a £3.7 million hit from inventory liquidation and connected costs, including a £2.5 million increase in the US stock provision and £1.2 million losses on disposal and other wine liquidation expenses.
Looking towards the future, Naked Wines anticipates delivering an adjusted EBIT, excluding inventory liquidation, ranging between £3 million and £8 million. The projected sales for the full year are expected to lie between £240 million and £270 million. According to Rodrigo Maza, Chief Executive, ‘Naked Wines is in a better position, both financially and strategically.’ He further elaborated on the company’s robust financial standing and the loyalty and engagement of its member base. Maza highlighted that strategic initiatives focused on customer acquisition and retention are yielding valuable insights, and the company is experiencing solid trading during the peak season.
Naked Wines remains cautiously optimistic about achieving strategic and financial milestones despite encountering sales setbacks.
