Online & Digital

Naked Wines returns to profit as sales hit £350m

The group witnessed a Repeat Customer sales retention of 80%, and its Active Angel base, or subscription customers, grew by 9% to 964,000 against the prior year

Naked Wines has welcomed a year of “strong execution” despite ongoing headwinds, with the group’s adjusted EBIT hitting £2m in FY22, up from a loss of £1.5m the prior year, as the group benefited from returning customers. 

Total sales were up by 5% YoY to £350.3m, while on a two-year basis against FY20, group sales rocketed 78%.

The group witnessed a Repeat Customer sales retention of 80%, and its Active Angel base, or subscription customers, grew by 9% to 964,000 against the prior year. 

Overall, its Repeat Customer Contribution profit was £86.2m against £84.9m last year, driven by a 13% increase in Repeat Customer sales on a constant currency basis.

The group also invested £41.3m in new customers over the period, delivering a five-year forecast payback of 1.5x, despite the challenging market environment.

Nick Devlin, group CEO, said: “Our unique model offers a win for both winemakers and consumers and generates attractive and well-proven unit economics. In the past year we moderated investment responsibly as we navigated inflationary challenges. In that context, I’m pleased with the substantial growth in sales to repeat members supported by sales retention above our expectations for the year at 80% and our ability to deliver profitability. 

“Looking ahead Naked Wines is well positioned to continue to grow amidst a changing consumer environment. Our enhanced scale, attractive unit economics and healthy balance sheet allow us to continue to invest for growth. At the same time we will not pursue growth at any cost, and our guidance is that we intend to trade the business at or around breakeven this year.”

He added: “We believe this is the responsible balance to strike in FY23, mindful of the levels of macro-economic uncertainty but also of the opportunities we see ahead and the potential for disruptive models like ours to gain traction in tough times as consumers revaluate their purchasing choices. 

“Additionally we will focus on steps to ensure our contribution economics support sustainable growth and on striking an effective balance of quality and volume. I believe these steps will best enable us to increase customer lifetime value and therefore over the mid-term maximise our ability to deliver attractive, sustainable growth.”

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