Naked Wines has reported a loss and a drop in sales as it starts moving towards “sustainable cash generation”.

Total revenue fell 20% to £132.3m at reported currency rates, while total adjusted sales dropped 21% to £131.6m in the 26 weeks to October 2.

The wine specialist posted a loss before tax of £9.7m, plummeting from a £0.2m loss in the same period last year. Adjusted EBIT decreased 52% to £2.2m.

The retailer made a £9.2m investment in new customers, while it said repeat customers were “performing well with higher revenue per customer in all markets”.

Naked Wines said it will “continue to drive toward sustainable profitability” and reduce costs while moving towards cash generation.  

Customer order patterns over peak trading months are currently in line with the group’s forecasts.

It said “a lot of good work has already been done” and it expects to “outlay £50m less cash on inventory” in FY24 and a further £38m less in FY25.

Naked Wines executive chair Rowan Gormley said: “We are moving towards a period of sustained cash generation. We have taken out £3m of cost with £10m more to come and expect to generate £40m to £ 50m 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.”

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