Naked Wines (WINE) H2 2024 earnings summary

Executive summary

• Significant progress made in stabilizing the business through cost reductions, improved liquidity, and a new leadership team focused on addressing acquisition challenges.

• Revenue declined 13% year-over-year to £288.5m, with a 17% drop in active Angels and adjusted EBIT down 66% to £5.0m.

• Cash and liquidity improved, with net cash at £19.6m (+92% YoY), supported by a new long-term funding facility.

• Focus shifted to restoring growth through customer acquisition, personalization, and retention initiatives.

• Customer recruitment remains challenging, but repeat customer sales KPIs are steady and attrition rates are stable.

Financial highlights

• Revenue fell 13% year-over-year to £288.5m; adjusted EBIT decreased 66% to £5.0m.

• Statutory loss reported, with nearly £17m in adjusted items, including U.S. inventory provisions and goodwill impairment.

• Operating G&A costs reduced by 11% to £35.9m; total inventory down 11% to £144.9m.

• Net cash position improved to £19.6m, with pre-tax operating cash flow swinging from -£25.3m to +£10.3m.

• Goodwill impairment of £7m and inventory provision of £15.4m recorded.

Outlook and guidance

• FY25 revenue guidance: £240–270m, representing a (16)% to (4)% decline.

• Adjusted EBIT (including inventory liquidation losses) expected between -£2m and £6m; closing net cash £25–35m.

• Guidance assumes flat customer recruitment/retention trends and prudent overlays for inventory liquidation losses (£2–5m).

• Q1 trading in line with expectations, but volatility persists, especially in the U.K.

• Focus on achieving a 2x payback on customer acquisition by FY 2026 to return to growth.