Online wines retailer Naked Wines (WINE:AIM) saw its share price rally more than 12% to 306.5p after revealing a surge in demand during the coronavirus lockdown. The company now expects to beat its previous 2020 sales forecast.
Since restrictions on social gathering began Naked Wines, the online business developed by Majestic Wine before the chain was sold last year, has seen higher levels of demand from both new and repeat customers ‘in all of our markets’, but ‘particularly in the US’, and has ‘good momentum’ at its heels.
Given the rapidly-evolving COVID-19 pandemic, Naked Wines said it is too early to provide detailed updated guidance, but management led by chief executive Nick Devlin believes ‘we are very well placed to respond to growing demand for online delivery in all our markets.’
Revenue for the year to March 2020 is now set to top £200m, slightly ahead of the company compiled consensus of £198.9m. Connecting wine drinkers with world class winemakers from around the globe, Naked Wines is seeing bumper demand from home-bound wine enthusiasts unable to drink in bars and restaurants, but with the ability to order online.
Many consumers will be seeking to settle nerves with a glass or two amid the anxiety-inducing pandemic, while bringing some normality and enjoyment into their lives during the global lockdown.
Naked Wines also sweetened investors up with the news that as at 30 March, it had over £50m of cash in the coffers and no debt and ‘has not seen any material change in patterns of customer funds withdrawals. With good access to inventory and significant flexibility to direct our marketing spending to the most effective channels, we expect to continue to invest for growth for as long as strong levels of consumer demand persist.’
In each of the markets in which Naked operates - namely the UK, US and Australia – its office staff have been working remotely since 17 March.
The £199m cap assured its supply chains continue to operate efficiently, albeit working within additional health and safety constraints.
And since winemakers are considered agricultural, Naked Wines assured investors that ‘the grape harvest and wine production processes we depend on around the world have been able to continue largely unaffected.’