Shares in Naked Wines pop to year-high on plan to unlock value | AJ Bell

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Three-stage strategy could mean significant capital returns

Thursday 03 Apr 2025

Shares in online drinks retailer Naked Wines (WINE:AIM) jumped 10p or 16% to a new 12-month high after the company unveiled a new strategic plan to generate sustainable earnings growth and deliver ‘significant’ cash distributions.

There are three legs to the plan, the first being to achieve £75 million of cash from the balance sheet largely by liquidating £40 million of excess inventory.

The second is to get to £10 million to £15 million of annual EBITDA (earnings before interest, tax, depreciation and amortisation), assuming revenue stabilises at around £200 million to £225 million based on ‘a profitable core of members’.

The third leg is to achieve 5% to 10% annual sales growth, which the company sounds confident it can manage as it has ‘the right customer membership model’.

If all goes well, the board will allocate surplus capital to whatever maximises value for investors including buying back shares.

Analyst Andrew Wade at US broker Jefferies commented: ‘While there is plenty of detail to be worked through here, it is encouraging to see Naked committing to significant cash returns, a substantial EBITDA and a longer term growth agenda.’