Strong US trading puts Naked Wines on track, but losses mount
Strong trading in the US helped Naked Wines stay on track in the first half of the financial year, it reported this morning, however the company’s losses after tax widened to £6.4 million, on the back of investment in new customers.
The company, which reported losses of £6.3m in the same period last year, saw revenue growth of 16%, to £87.5 million, boosted by the strong performance of the US, up 24%, but the UK and Australia markets proved more sluggish.
The investment spend in acquiring new customers, which rose 29% to a total £10.3 million (around half of that anticipated for this financial year) also hit profits, with EBIT down £3.8 million, compared to £1.7million last year
Net debt currently stands at £25.8 million, however the £111 million from the sales of Majestic Retail, and Commercial, the sale of the Ealing property to developers and fine wine arm Lay & Wheeler have yet to be finalised, although this is due to be completed at the end of the year. These disposals will deliver a strong balance sheet with strong net cash position, the company said.
CEO Rowan Gormley, who it was announced would be stepping down from the business after Christmas, said Naked Wines had built a solid foundation for growth, and the US business was well up on the key measures of investment, payback and sales.
“Naked Wines is now a pure-play online retailer, with a huge opportunity in the US wine market, and the resources to capitalise on that opportunity,” he said.
However he noted that the UK and Australian markets were more sluggish and the company would slow the rate of increase of investment in new customers in the second half as a result.
Gormley’s designated successor, COO Nick Devlin said that Naked had “never been in better shape”.
“We now have the internal capability, clarity of purpose and financial resources to take the business through its next chapter of growth. I am enormously excited to be given the opportunity to harness this platform and realise Naked’s full potential.”