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(Sharecast News) - Naked Wines reported total sales of £166m in its first half on Wednesday, up 4% on a reported basis but down 3% on a constant currency basis year-on-year.
The AIM-traded firm said its adjusted EBIT was nearly four times higher than the same period last year in the 26 weeks ended 26 September at £4.6m.
It did, however, swing to a £0.2m loss before tax, from a profit of £1.3m, which the board put down to "material inventory provisioning".
Net cash at period end totalled £23m - down from £57.1m - as well as £41m of additional liquidity available from its renegotiated credit facility.
Looking ahead, Naked Wines reshaped its plans to deliver profitability at a "sustainable level" in October, and said on Wednesday that given the uncertain economic outlook, it intended to continue to operate on a reduced cost base in the 2024 financial year.
General and administrative costs would benefit from a full year of savings, offsetting inflationary pressure.
Marketing costs would remain "substantially lower" than 2022 in 2024, unless the firm saw a "marked improvement" in customer recruitment economics.
Overall, the board said it anticipated stronger profitability in 2024 as a result of its pivot-to-profit strategy.
"We announced in October our decisive plans to deliver profitability through reshaping our strategy," said chief executive officer Nick Devlin.
"In the half we took the first steps to reduce our costs and drive improvements to our liquidity, profitability and unit economics in the near-term.
"Ultimately, we are laying the foundation for a return to our ambition of sustained, profitable growth, whilst also providing ourselves with greater resilience."
Devlin said that as expected, in the short-term the changes undertaken had reduced the company's sales trajectory, though the full impact of that would be seen in the coming periods.
"However, the strength of our business model is clearly visible through underlying retention rates that remain unchanged to pre-pandemic levels, our success in realising price uplifts and improving payback levels.
"We are at the peak in our inventory cycle and, with our destocking plan, we expect to generate cash in the 2024 financial year whilst protecting our winemakers as well as our Angel members.
"Currently, we are trading profitably in line with our expectations over the key holiday quarter and reconfirm our revised guidance for 2023 shared in October."
At 1137 GMT, shares in Naked Wines were up 6.82% at 103.94p.
Reporting by Josh White for Sharecast.com.