Online retailer Naked Wines saw its share price plummet 35% this morning despite posting a pre-tax profit of £2.9m, compared to a loss of £10.7m in its annual results to March 28 .
Revenue also rose 3.0% to £350.3m from £340.2m. However, the results revealed that the company’s cash balance had more than halved, from £85m to £40m a year ago, causing panic in the markets.
Company costs were similar to last year, with advertising costs falling to £34.1m from £42.3m, but fulfillment costs rose to £62.6 million from £58.3 million.
The company was optimistic and said it would not continue to grow “at any cost” and that it intended to trade the business at “breakeven or around breakeven this year”.
Nick Devlin, Group CEO at Naked Wines, said the company was “well positioned to continue to grow” in a “changing consumer environment”.
He added: “Over the past year, we have responsibly moderated investment as we navigated inflationary challenges. sales exceeded our expectations for the year by 80% and our ability to deliver profitability.”
Devlin said his position was a responsible balance to be found looking ahead to 2023 and that he was “aware of the levels of macroeconomic uncertainty”, but also saw opportunities and the “potential for disruptive patterns like ours to gain ground in difficult conditions”. as consumers re-evaluate their purchasing choices.
Naked Wines was founded by Rowan Gormley in 2008 and was acquired by brick-and-mortar player Majestic Wines in 2015.