Naked Wine heralds strong year despite pretax losses of £10.7m
Naked Wines heralded a strong performance last year, with sales up 68% as the US became its largest market, however pre-tax losses mounted to £10.7 million.
Sales at the online wine subscription service rose 68% to £340.2million in the year to 29 March 2021 as consumers shifted to online wines purchasing. Its customer base also rose by around 53% to a total of 886,000 ‘angel’ investor, with improved retention rates. Repeat customers accounted for around 83% of business, it said.
There were also strong growth in the US, where sales rose 78% to £161.7 million, making the US the company’s largest market, representing 48% of total sales. The US is expected to continue to drive growth, it said.
The losses of £10.7 million before tax, and EBIT loss of £1.5million reflected the increased investment in attracting new customers, the company said. This rose from £23.5 million last year to around £50.0 million, which it said would deliver a five year forecast Payback of x3.
Group chief executive Nick Devlin said the company had made “significant progress” in its mission to “disrupt the wine industry for the benefit of its customers” and stood at an “inflection point” with outstanding growth potential ahead.
“It is clear to us that the pandemic has served to underscore the value of our business model in connecting winemakers and consumers directly and proven the opportunity before us,” he said.
The company will focus on four strategic initiatives through 2021 he said. These comprise investing in new customers to boost payback, enhancing the customer proposition to improve LTV, leveraging its scale to boost value for customers and broadening its straight to-market strategy to drive growth.
Currently it is on track for total sales of £355 million – £375 million, in the 2022 financial year (allowing for strong comparables), with investment in new customers set to reach £40 million – £50 million. It said repeat customer was set to contribute £85 million – £90 million of profit, although the repeat customer contribution margin was likley to to decline slightly and repeat customer sales retention would dip to the mid-70%’s, below the company’s long-term average of 83%. General and administrative costs were likely to be around £46 million – £49 million.
The company said it provided financial support for 36 winemakers through our $5 million COVID Relief Fund, and also launched a A$5 million “Stop the Squeeze” campaign to support growers and producers in Australia who have been challenged by the ongoing tariff disputes between Australia and China.