On Thursday, Naked Wines released its financial update, announcing a revamp of its board and expenditure goals.

Naked Wines shares surged 25% following the report.

The online wine retailer reported net cash of £22 million, with £64 million of available liquidity as of H1. However, the group stated that sales and active angels will fall in the near term due to a focus on profits over growth.

Furthermore, after notable improvements in sales patterns and profitability, the business anticipates H1 revenue to be £166 million, up 4%. Meanwhile, adjusted EBIT is estimated at £4 million.

“We recognise that in pursuit of rapid growth we have made mistakes,” said Nick Devlin, CEO

Devlin added, “whilst the business today remains materially bigger than pre-pandemic, in 2021 we bought inventory and added to our cost base in anticipation of sustained faster growth which has not been delivered; today we are taking steps to reset our cost base and unwind inventory levels.

As a result, the company has revised guidance to deliver profitability at a sustainable level. The company intends to operate on a reduced cost base in FY24, as marketing costs will remain substantially lower.

The group expects FY23 revenue to be between £340 million and £360 million.

Board Changes

Elsewhere, Naked Wines announced the following board changes:

Darryl Rawlings will step down as Chairman of the board, effective today and as a member of the board at months’ end

David Stead will assume the role of Chairman of the board, effective from today.

Deirdre Runnette will assume the role of Senior Independent Director (“SID”) also effective from today.

The Board has initiated the process to recruit a new Chair of the Audit Committee and an announcement will be made in due course.

The board is in active discussions with James Crawford to assume the CFO role on a permanent basis to support the delivery of our new operating & financial plan.