Naked Wines PLC shares fell Thursday after it said it expects breakeven Ebitda in the new fiscal year due to market volatility after it swung to a fiscal 2022 pretax profit on reduced advertising costs.
Shares WINE, -29.37% at 0730 GMT were down 71.4 pence, or 25% at 216.0 pence.
The London-listed online wine retailer said it was well-positioned to grow and invest further in the business, although it won’t pursue growth at any cost and intends to trade at around breakeven earnings before interest, taxes, depreciation and amortization this year given the uncertain macroeconomic environment.
Total group sales for the new year are expected to be in the range of 345 million to 375 million pounds ($423 million-$459.8 million), and it expects on-year sales growth to accelerate across fiscal 2023.
The company also said its five-year investment payback to date from fiscal 2022 fell short of its projected goal and historical levels, due to market volatility from the coronavirus pandemic and inflationary pressures on household budgets.
Naked said it expects to see a short-term reduction in new customer investment and a reduction in the fiscal 2023 revenue growth rate, though it also expects improved margins on new customer sales and increased investment paybacks.
The company said that for the year ended March 28 it swung to a pretax profit of GBP2.9 million from a pretax loss of GBP10.7 million a year prior. Advertising costs reduced to GBP34.1 million from GBP42.3 million in fiscal 2021, though fulfillment, sales and general and administrative costs all rose slightly.
Revenue rose to GBP350.3 million, from GBP340.2 million. The company said it had a repeat customer sales retention of 80%, down from 88% a year prior but ahead of its own expectations, and its subscription customer base grew 9% to 964,000.
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