31st Aug 2022 09:23
(Alliance News) - Irish broker Davy said Naked Wines PLC "probably should be in private hands" after a near 80% share price slide in the year-to-date.
Naked Wines was trading 5.5% lower at 136.10 pence in London on Wednesday morning, down 78% since the start of 2022 and having lost 84% of its value over the past 52 weeks.
Ahead of November's interim results, Davy noted that Naked Wine's last performance indicator was in June, when it released a disappointing set of results for the 2022 financial year.
In its financial year that ended March 28, the Norwich-based online wine retailer posted a pretax profit of GBP2.9 million, versus a loss of GBP10.7 million in financial 2021. However, Naked Wine's cash balance dropped to GBP40 million from GBP85 million a year ago.
For its current 2023 financial year, Naked Wines expects sales in the range of GBP345 million to GBP375 million, down 4% in the worst and up 4% in the best scenario on financial year 2022.
Since the annual results, Davy noted some "curious people-centric newsflow".
In July, Naked Wines said that then-chief financial officer Shawn Tabak had stepped down. James Crawford, who was managing director of the Naked Wines business in the UK, was appointed as CFO on an interim basis through to June 2023. Naked Wines said he will combine this interim role with his responsibilities as managing director. Crawford had been CFO of Naked Wines from 2015 to 2020.
The interim results should be supportive of full-year forecasts given the modest outlook, said Davy, with FactSet showing revenue of GBP376 million and an adjusted loss before interest, tax, depreciation and amortisation of GBP500,000.
"[Naked Wines] is increasingly something of a curiosity – feels like a scale US e-commerce business, talks like a scale US e-commerce business but looks and trades like an increasingly challenged UK, AIM-listed small cap," said Davy.
The current company is the result of the acquisition by high-street retailer Majestic Wines of online-only outfit Naked Wines in 2015 and the subsequent disposal of the Majestic Wine business in 2019.
"It probably should be in private hands," Day concluded. "It is clearly something of an enigma and the recent newsflow seems, well, enigmatic."
Davy has a 'neutral' rating on the stock.
By Lucy Heming; [email protected]
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