The firm’s customer base increased 37% year-on-year to 757,000 during the first half of the firm’s 2021 financial year. “Quite simply, many customers did not know they could order wine online, to be delivered to their door, until COVID-19 motivated them to look, and they are now embracing it,” it said.
Revenue increased 95% in the US, 76% in the UK and 48% in Australia, with new customer sales, repeat sales and margins all increasing.
Naked believes online retailing has now “come of age”, and it has increased warehouse capacity by 104% to meet higher ongoing demand.
The firm’s share price opened at 520p this morning, a 4.1% increase on the 499.61p it closed at yesterday.
It now expects sales growth of 55% to 65% for the current year, compared with an earlier forecast of 40%.
Chief executive Nick Devlin said: “Naked Wines is a bigger, better business than it was twelve months ago.
“The last six months have been a critical period in the development of the company. We have delivered exceptional growth and a permanent step change in scale and efficiency for the organisation.
“We have a business today that is not only larger, but structurally improved and ideally positioned to deliver sustained growth in the coming years.”
The business made a loss of £8.9 million for the six-month period, up from a £5.4 million loss the previous year.
That was driven by a £4 million non-cash write down to nil in the fair value of the Calais-related deferred contingent consideration from the sale of the Majestic Wine business.
Naked sold the Majestic brand and retail empire to Fortress last year. The terms of the disposal left £5 million of consideration contingent on the post-Brexit regulatory environment sale business performance of the Majestic Calais stores, which was valued at £4 million a year ago.
In September, the UK government announced that Brits’ personal allowances for duty free import of alcoholic beverages will be considerably lower once the UK leaves the EU on December 31. The Naked board believes this will badly affect those Calais stores, so it has written off the value of this asset.
Adjusted EBIT was a loss of £3.2 million, down from a £4.5 million loss in the prior year. That is despite increasing investing in new customer acquisition by 121% to £22.7 million during the six months to September 28.
The firm’s cash position improved, with £76.3 million now on the balance sheet, compared to £21 million net debt a year ago.
“Ultimately the most significant impact of Covid-19 on Naked Wines is not found in these interim results, but in the way it has accelerated the growth of the online wine category and increased consumer willingness to trial a new and better way to buy wine,” said Devlin. “Delivering transformative growth, against a backdrop of new working conditions required by Covid-19, has required us to rapidly solve a series of operational challenges.
“We have done this whilst maintaining high levels of customer satisfaction and I am tremendously proud of the resilience, flexibility and capability displayed by our staff around the world.
“I would like to personally thank all of them for their commitment and the passion with which they have pursued our mission to connect the world’s best independent winemakers to our community of wine drinkers.
“Looking ahead, whilst the economic outlook remains uncertain, we move into the second half with continued trading momentum, supported by a strong cash balance and with conviction in the potential to unlock further growth opportunities in all our markets.”
