Shares in Naked Wines PLC (AIM:WINE, OTCQX:NWINF) surged 16% in early trading after the company unveiled a new strategy focused on cash generation, leaner operations, and long-term growth.
The wine subscription business said it expects to unlock £75 million from its balance sheet, primarily by liquidating £40 million of excess inventory. It is now adjusted free cash flow positive and plans to start shareholder distributions soon.
Under the new plan, Naked aims to deliver £10–15 million in annual EBITDA and grow underlying revenue at a 5–10% rate. Cost savings of £23 million have been identified, and marketing efforts will centre on profitable, loyal members.
CEO Rodrigo Maza said the strategy marked a “powerful” shift and confirmed that full-year trading remains in line with expectations. The group’s net cash is expected to hit £33 million by March, with further shareholder returns planned once sustainable profitability is locked in.
Panmure Liberum pointed out that Naked Wines' cash and inventory are now much greater than its current market capitalisation.
As a result, the shares, up 10.2p at 73.2p, offer 'huge upside'. As a result, it has upgraded to 'buy' and ramped up its price target to 150p from 50p previously.