‘Belter of a year’ for Naked Wines
Driven by strong growth in the US, Naked Wines has made its first profit on the back of generating £104.3 million revenue in FY16.
Naked Wines parent company, Majestic Wine, reported its full year figures, achieving its first positive like-for-like sales performance in four years. However costs surrounding the acquisition of Naked Wines saw profit decline 74.5 per cent on a year-on-year basis, falling to £4.7 million this year.
“At Naked Wines we had a belter of a year – breaking through the £100 million sales barrier and delivering a maiden profit,” said Rowan Gormley, Majestic Wines CEO.
Naked Wines delivered £1 million adjusted EBIT, ahead of expected breakeven due to combination of better angel economics and lower growth spend.
“We have to admit we weren’t planning to have made a profit this year,” Gormely said. “This is a sign that we have not invested as strongly as we should have, particularly in the USA where we had less inventory than we needed during the year. Our goal is to keep finding opportunities to invest in and so we plan to increase our growth spend in the business this year.”
The group is aiming to improve its inventory control for Naked Wines in the US after running out of key selling lines at peak trading times.
Majestic Wines has now completed the first year of its three-year transformation plan, with the goal of achieving sales of £500 million by 2019.
“We have taken the first step on a long journey – it was a good start but it is just the first step,” said Gormley. “Early signs are that the plan is starting to work. Strong sales figures reflect the hard work being done on the ground by the whole team.”
“The management re-organisation is now complete, I am delighted with the teams we have in place across the group.”
Gormley also highlighted challenges ahead for the business.
“Trading conditions remain tough in the UK especially, and we expect them to stay that way,” he said. “Volatile currency movements will push up cost of goods. We are implementing a new supply chain and IT system, both of which are complex projects. Our plan however remains unchanged, as does our goal – £500m sales by 2019.”