Naked projects revenue in excess of £200m

By Lisa Riley

Published: 09 April, 2020

Naked Wines has announced it expects revenue for FY20 to be in excess of £200m, slightly ahead of current consensus.

The online retailer said it had seen higher levels of demand from both new and repeat customers in all of its markets, particularly in the US, following restrictions on social gathering.

As a result the business was finishing the year “with good momentum”, it said this morning in a Covid-19 trading update.

Naked had continued to “invest aggressively” in new customer recruitment and now expected its total investment for FY20 to be towards the middle of the £20-25m range it indicated in its interim results, added the company.

While recognising that future trading dynamics “clearly remain very uncertain”, Naked said it was operating from “a position of financial strength which gives us maximum future flexibility around how we prioritise uses of cash”.

“In the short term, the introduction of social distancing has accelerated the shift in consumer buying behaviour towards online, leading to increased demand from both new and existing customers across all our markets,” said group chief executive Nick Devlin, who took over from founder Rowan Gormley at the end of 2019.

“In the US, especially, I believe the current period could serve as an inflection point for the growth rate of the online category, and as the largest direct to consumer player in the US market we are well positioned as customers move online. Over the medium-term, Covid-19 and its economic impact clearly creates uncertainty.”

With the situation evolving rapidly, Naked said and it was too early to provide detailed updated guidance, but said it believed it was "very well placed to respond to growing demand for online delivery in all our markets”.

"With our advantaged consumer proposition and strong balance sheet the business is well placed to meet the challenges of a changing consumer environment,” said Devlin.

As at 30 March 2020, the group had over £50m of cash and no debt, it said, and had not seen "any material change in patterns of customer funds withdrawals".

“With good access to inventory and significant flexibility to direct our marketing spending to the most effective channels, we expect to continue to invest for growth for as long as strong levels of consumer demand persist."

Last November, Naked posted widening pre-tax losses, with losses before tax hitting £6.2m in the six months to 30 September, compared to £5.1m in the same period a year earlier. Turnover grew 16% to £87.5m.

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