Naked Wines PLC (AIM:WINE, OTCQX:NWINF) performed in line with company expectations in the third quarter, with the online wine retail witnessing a 10% year-on-year decline in constant currency sales, an improvement from the 18% dip experienced in the first half of the financial year.
A key highlight from the update is the 35% increase in new customers acquired, a significant leap supported by a 70% rise in investment for new customer acquisition.
This growth in new customers indicates a rejuvenation in customer recruitment efforts.
Although the average repeat customer base shrunk by 12%, sales per repeat customer witnessed a 2% uptick.
Financially, the company is expecting its third-quarter adjusted EBIT to be within the range of £3-5 million alongside a stabilisation of the company's closing net cash position at £3 million, with a substantial liquidity buffer of £45 million.
The company has initiated cost-saving measures aimed at reducing the annual run rate of selling, general and administrative expenses by £7 million, targeting a range of £30-33 million by the end of 2025.
This strategic move, albeit accompanied by a one-off cash cost of approximately £3 million, is set to fortify the company’s profit potential in the long run.
Naked Wines’ executive chairman Rowan Gormley expressed satisfaction with the team's efforts in executing a successful peak trading season.
“Notwithstanding this, we have to recognise that we are a smaller company post-Covid and our cost base has to reflect this,” said Gormley.
“We have therefore taken the painful but necessary decision to reduce SG&A costs by £7m per year, securing our profit potential. Sadly this means that we will be losing a number of valued colleagues who have been informed of our plans.
As part of Naked Wines’ workforce reduction, the group has decided to reduce the size of the board, culminating in the departure of Melanie Allen as a non-executive director.
“I remain committed to building a leaner and stronger Naked as we continue to address the challenging revenue trends. I'd like to thank the team, our suppliers and our shareholders for their patience and support as we continue to drive these changes," stated Gormley.