Naked Wines PLC (AIM:WINE, OTCQX:NWINF)’s revenues fell by 20% year on year to £132 million for the first half of its financial year, with adjusted earnings totalling £2.2 million and losses before tax totalling £9.7 million.
In a move towards financial stability, Naked Wines has significantly reduced its general and administrative costs by 27%, aligning with the decreased sales performance.
This strategic cost reduction is part of the company's broader focus on achieving sustainable cash generation and profitability in the coming periods.
Naked Wines continued its proactive approach to inventory management by significantly reducing future inventory intake.
Purchases are expected to end the 2025 financial year at £60 million to £70 million below the forecast cost of goods sold, in a move to bolster the company's financial position in the long run.
Repeat customers remain a strong suit for Naked Wines, showing increased revenue per customer across all markets.
Additionally, the company has seen lower cancellation rates and a stabilisation of its UK customer base.
Post period, net cash as of the end of November has improved by £7.1 million, with £53 million total available liquidity.
Executive chairman Rowan Gormley commented: "We are moving towards a period of sustained cash generation. We have taken out £3 million of cost with £10 million more to come and expect to generate £40-50 million of cash from inventory over the next 18 months.
“In addition, we have made good progress with testing an enhanced customer proposition to restore us to growth. I want to thank our people, our winemakers and our customers for their support and reiterate our determination to make sure that they are rewarded for it."
Though the trading environment has been challenging, Gormley remains optimistic.
He stated: “Naked has been testing a number of improvements to our new customer proposition since October last year, seeking improved payback and helping us access a wider demographic.
“Right now, it looks like at least one of the ideas is a winner, and we are testing at scale in all three markets over the peak season. We will have more to tell you on this next year once we have reviewed test data over an extended period.”