Naked Wines swings to £15m loss in FY23

Naked Wines chairman Richard Gormley has issued an apology to shareholders after it reported a loss of £15m in 2023, compared to a profit of £2.9m last year, according to its full year results for the 53 weeks ending 3 April 2023. The group attributed its losses to non-cash goodwill impairment and inventory provision charges. Its total sales also dropped to £354m, down 8% on a 52-week comparable basis. Sales to new customers dropped to £26.9m, down from £34m in 2022. Naked Wines stated that with revenue below its initial plan, it is marginally behind its destocking plans but has taken steps to further reduce future purchase commitments while continuing to “manage costs tightly”. However, Adjusted EBITDA increased to £17.4m, or £16.3m on a 52 week comparable basis. This was driven by lower new customer investment. Gross profit also increased 6% from £153.3m to £162m on a comparable 52-week basis. Looking ahead, Naked Wines expects full-year revenues to decline 8% to 12% as the prior period comparison eases in the second half of the year and the rate of decline in customer base slows. According to its current view on FY24 trends, it expects new customer investment to be between £23m-£27m and repeat customer contribution to be between £72m-£80m. Additionally, it also expects Adjusted EBIT to be between £8-£12m Nick Devlin, group chief executive, said: “The trading environment is tough, but Naked remains highly resilient. We have taken decisive action and have met the key goals in our “pivot to profit” strategy. Our focus now is on delivering profitable growth. “We recognise that the environment is likely to remain tough and are configuring the business to be profitable and cash generative despite challenging conditions. A leaner and more focussed Naked will be best placed to deliver for our customers and winemakers. I believe we can emerge from these challenges as a stronger business.” He added: “I want to thank our teams and winemakers for their support and commitment over the past year. Across the board they have embraced a program of rapid change and laid the foundations for future profitable growth ahead.” In an open letter, Rowan Gormley, chairman of Naked wines, also apologised to its shareholders. He said: “Firstly, an apology. The whole board of Naked Wines regret that your support and patience as shareholders, winemakers, angels and employees has not been rewarded. We are all determined to remedy that. “I am pleased to report that the management team have recognised the challenges very clearly, acknowledge where different actions could have been taken and are acting decisively to steer Naked through this period. They are highly motivated and determined to ensure that all stakeholders are rewarded for their support.”