Naked Wines sees revenue grow 80% in 1H21 with sales boost

Francesca Morgan
RNS Newswire
10:42, 19th November 2020

Naked Wines (AIM:WINE FOLLOW) said it has delivered “exceptional growth” in 1H21 after revenues soared 80% as it received more wine orders as a result of the coronavirus lockdown. 

Following the closure of all restaurants and bars as a result of restrictions aimed at curbing the spread of the coronavirus earlier this year, the online retailer reported a surge in sales with revenue for the 26 weeks to 28 September 2020 up 80% to £157.1m (1H20:£87.5m).  

As a result of the shift to online buying, the company said online sales of its US business recorded its strongest revenue growth in 1H21 and now represents 49% of group sales. 

With ‘exceptionally strong trading performance in all markets’, the business, developed by Majestic Wine, said it had delivered an increase in repeat customer contribution of 89% compared to H1 FY20; the same growth it achieved in total between FY14 and FY20. 

It said growth was also driven by new customer sales which were recorded up at 166%, with the company investing 121% more in these customers to £22.7m (1H20: £10.3m). 

Adjusted EBIT was a loss of £3.2m, down from £(4.5)m in the prior year. It said the reduction was achieved despite a substantial uplift in investment in new customers and higher fixed costs due to the strong growth in repeat sales and contribution from its existing customers. 

The company said the business has been strongly cash generative throughout 1H21, ending the 26-week period to 28 September 2020 with £76.3m of cash (1H20: net debt £21m). 

Shares in Naked Wines have increased by over 18% in the past month to open 0.09% higher this morning at 497.75p following the announcement. 

WINE price chart

The company said positive trading momentum has been sustained into the start of 2H21 and told investors that it is ‘mindful of significant levels of political and economic uncertainty.’ 

“We have delivered exceptional growth and a permanent step change in scale and efficiency for the organisation,” said Nick Devlin, Chief Executive Officer of Naked Wines, who described the company as “a bigger, better business than it was twelve months ago.” 

He said, “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.” 

He added, “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." 

The group said it intends to continue to invest alongside its winemakers to expand its range and build its reputation ‘as the home to the world's best independent winemakers.’ 

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