Naked Wines PLC Trading Update (9072M)

TIDMWINE

RNS Number : 9072M

Naked Wines PLC

17 January 2023

17 January 2023

Naked Wines plc

("Naked Wines" or "Group")

Trading Update for the quarter ended 26 December 2022

Solid holiday trading enables increased profit guidance, medium term conditions remain challenging

Highlights:

-- FY23 adjusted EBIT outlook increased to GBP13-17m, from previous guidance of GBP9-13m. Key drivers:

o Solid Q3 trading performance with flat reported revenue vs prior year

o Improved repeat customer contribution margin year-on-year

o Continued SG&A control

o No change to one-off restructuring items guidance (GBP12m total cost)

   --      New customer investments in line with previous guidance, significantly lower year on year 
   --      FY24 forecasts are under review in light of lower levels of customer recruitment 

Nick Devlin, Group Chief Executive, commented:

"We have executed well against our pivot to profit in our key holiday quarter delivering flat reported revenue vs prior year (-6% constant currency), improving year-on-year repeat customer contribution margins and tightly controlling our SG&A expenses.

Against a challenging market environment the robust performance of our repeat customers reflects the enduring appeal of Naked's core proposition combined with strong operational performance - with increased throughput from our investment in warehouse automation supporting an especially strong peak in the UK.

However, the consumer and marketing environment remains challenging and opportunities to invest in new customer recruitment at attractive payback levels continue to be limited. We expect to spend GBP20-24m on new customer investment in FY23, around 40% below FY22 levels. This is below the run rate necessary to maintain our current scale and we are likely to see a modest decline in revenue in FY24 as a result. As we enter our detailed FY24 planning cycle we will be evaluating a number of options to improve this outlook while remaining disciplined in our approach to investment evaluation and capital allocation.

Costs have remained tightly controlled with SG&A spend outlook at the bottom end of our guidance. Combining this with repeat contribution profit at the top end of expectations we now expect FY23 adjusted EBIT to be in the range of GBP13-17m (previously GBP9-13m)."

 
 Q3'23 Sales growth by Geography (p/e Dec    Constant currency   As reported 
  26 2022): 
 UK                                                 -1%              -1% 
                                            ------------------  ------------ 
 USA                                               -11%              +2% 
                                            ------------------  ------------ 
 Australia                                          -6%              -3% 
                                            ------------------  ------------ 
 Total Group                                        -6%              0% 
                                            ------------------  ------------ 
 Q3'23 Sales growth by customer type (p/e    Constant currency   As reported 
  Dec 26 2022): 
                                            ------------------  ------------ 
 Repeat Customer                                    -3%              +3% 
                                            ------------------  ------------ 
 New Customers                                     -32%             -27% 
                                            ------------------  ------------ 
 

The information contained within this announcement is deemed by the company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of the domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (as amended) ("UK MAR"). Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

For further information, please contact:

 
 Naked Wines plc                         [e-mail] 
  Nick Devlin, Chief Executive Officer 
  James Crawford, Chief Financial 
  Officer 
  Clara Melia / Chris MacDonald 
 Investec (NOMAD & Joint Broker)         Tel: [phone] 
  David Flin / Carlton Nelson / Ben 
  Farrow 
 Jefferies (Joint Broker)                Tel: [phone] 
  Ed Matthews / David Genis / Gill 
  O'Driscoll 
 Instinctif (Financial PR)               Tel: [phone] 
  Guy Scarborough / Damian Reece          593 
 

About Naked Wines plc

Naked Wines connects everyday wine drinkers with the world's best independent winemakers.

Why? Because we think it's a better deal for everyone. Talented winemakers get the support, funding and freedom they need to make the best wine they've ever made. The wine drinkers who support them get much better wine at much better prices than traditional retail.

It's a unique business model. Naked Wines customers commit to a fixed prepayment each month which goes towards their next purchase. Naked in turn funds the production costs for winemakers, generating savings that are passed back to its customers. It creates a virtuous circle that benefits both wine drinker and winemaker.

Our mission is to change the way the whole wine industry works for the better. In the last financial year, we served more than 934,000 Angel members in the US, UK and Australia, making us a leading player in the fast-growing direct-to-consumer wine market.

Our customers (who we call Angel members) have direct access to 268 of the world's best independent winemakers making over 2,200 quality wines in 22 different countries. We collaborate with some of the world's best independent winemakers like Matt Parish (Beringer, Stags' Leap) and 8-time Winemaker of the Year Daryl Groom (Penfolds Grange).

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

TSTEADFKFFPDEAA

(END) Dow Jones Newswires

January 17, 2023 02:00 ET (07:00 GMT)