Naked Wines HY26 Results: Adjusted EBITDA Soars 112%, Strategic Plan on Track

Naked Wines HY26: profits up, revenue down, strategy intact

Naked Wines has posted a tidy step forward at the half-year. Adjusted EBITDA excluding inventory liquidation and associated costs rose 112% to £3.6m, while gross profit margin improved to 19.5% from 16.9%. Revenue fell as expected to £89.5m (-20% reported, -18% constant currency) as the group throttled back inefficient customer acquisition and let the COVID-era cohorts normalise.

Management says performance is in line with full-year guidance laid out in August, and the first share buyback under the new capital allocation policy has been completed at £2m. The Board has also been refreshed, with Jack Pailing becoming Non-Executive Chair, Jan‑Hendrik Mohr joining as NED, and David Atchison providing marketing advisory support.

Key numbers investors should know

Metric (HY26)	HY26	HY25	Change
Revenue	£89.5m	£112.3m	-£22.8m
Adjusted EBITDA (excl. inventory liquidation and associated costs)	£3.6m	£1.7m	+112%
Statutory loss before tax	£(3.0)m	£(5.6)m	+£2.6m
Gross profit margin	19.5%	16.9%	+260 bps
Net cash (excl. lease liabilities)	£31.1m	£22.9m	+£8.2m
Free cash flow	£4.7m	£7.4m	£(2.7)m
Customer Acquisition Cost (CAC)	£69	£78	£-9
Acquisition Break-even (months)	44	75	-31 months
Member Retention Rate	76%	76%	Flat
NPS	76	76	Flat

Quick jargon check: Adjusted EBITDA strips out interest, tax, depreciation and amortisation, plus the specific costs of clearing excess inventory. CAC is the cost to acquire one new member. Acquisition Break-even is how long it takes for profit from a new member to repay the CAC.

Margins and cash: why the 19.5% matters

The 260 bps margin uplift is a real highlight. Management says roughly half came from price rises and cost savings (including reduced acquisition cost), with the balance largely reflecting higher FY25 inventory costs rolling off and other inventory movements. That trend has continued post period-end, helped by ongoing pricing discipline and efficiencies.

Net cash excluding leases is £31.1m, up £8.2m year-on-year and £1.0m since March, even after the £2m buyback. Free cash flow of £4.7m was lower than last year due to planned stock build for peak and higher capex (£1.5m) as digital transformation spend steps up. Inventory is £26m lower than a year ago and £5m higher than March as they stock for peak. Liquidation of surplus stock cost £2.6m in HY26 and continues “as planned” towards a medium-term target of £40m cash generation and $17m (c.£12m) of associated costs over the medium term.

Recalibrating around profitable members

Revenue is deliberately smaller because the team pulled back from poor-quality marketing channels. Customer acquisition investment dropped to £3.9m from £9.4m. The pay-off shows up in healthier unit economics:

• CAC improved to £69 from £78.
• Acquisition Break-even fell to 44 months from 75 months, helped by pricing in Australia and the UK, margin gains globally, and better retention in the US and UK.
• Return on Equity and Cash rose to 11% from 5%.

Core Members remain robust: retention is 76% and NPS is 76, both “excellent” and flat year-on-year. Revenue per Member edged down to £162 (from £168) as cohorts from the pandemic boom continue to normalise and consumer behaviour remains cautious.

Regional picture and B2B upside

All regions saw lower revenue as the strategy pivoted to profitability: US £35.7m, UK £41.6m, Australia £12.3m. Notably, repeat contribution margins improved in the UK to 18.6% (from 16.4% at constant currency) and held broadly steady elsewhere.

The recently acquired Sonoma winery – initially about manufacturing and storage savings – has begun to generate revenue from custom crush and bulk storage. Management also sees private-label opportunities, which could add a useful higher-margin B2B stream without diluting focus on the core Angel model.

Costs, adjusted items and leadership

General and administrative costs excluding adjusted items fell 6% to £14.6m after the April savings programme. Statutory G&A rose to £16.5m due to £1.9m of restructuring costs, which sit in adjusted items alongside £0.8m for the UK Extended Producer Responsibility (packaging) levy and a small FX hedge movement.

On governance and execution, the Board and leadership bench were beefed up. That matters because the plan now is mostly about disciplined execution – improving marketing ROI, shrinking acquisition payback and running a tighter balance sheet.

Guidance reiterated: what to watch into H2

Management reiterated FY26 guidance set in August:

• Revenue: £200m to £216m.
• Adjusted EBITDA (excl. inventory liquidation and associated costs): £5.5m to £7.5m.
• Net cash (excl. lease liabilities): £35m to £39m by year end, assuming the £2m share distribution completed in 2025.
• Inventory liquidations and associated costs: $17m (c.£12m) over the medium term.

Post period-end, gross margin is said to be still improving, inventory liquidation remains on track, and the group is “engaged with finance partners on future share distributions” in line with the new policy. The near-term aim is progressive adjusted EBITDA growth and continued cash generation, with a return to disciplined organic revenue growth in the medium term. Inorganic options will be considered if they enhance shareholder value.

My take: steady progress, smaller but healthier

This is a good half for what Naked Wines is trying to do. Profitability metrics are moving the right way, cash is building, and marketing discipline is clearly biting – CAC lower, break-even months falling fast, ROEC up. The buyback signals confidence and the B2B options at Sonoma add a fresh lever.

There are, however, trade-offs. Revenue is down sharply by design, and free cash flow dipped as they invested in stock ahead of peak and upped capex on the digital programme. Inventory liquidation still drags – £2.6m in HY26 – and there is more to do over the medium term. Consumer demand is described as cautious, and Revenue per Member slipped slightly. Those are the watch-outs.

Overall, though, the half-year does what investors wanted: prove the new strategy works. If margins keep compounding, inventory keeps normalising to plan, and acquisition break-even keeps heading towards the 24‑month target, the pathway to that £5.5m‑£7.5m adjusted EBITDA range looks reasonable.

Where the investment case stands now

Positives

• Adjusted EBITDA up 112% with gross margin at 19.5%.
• Net cash at £31.1m and distributions underway via a £2m buyback.
• Clear improvement in customer economics: CAC £69 and break-even at 44 months.
• Core member health steady: 76% retention and NPS 76.

Risks

• Top-line decline continues while marketing is kept tight.
• Inventory liquidation and associated costs still to work through over the medium term.
• Macro uncertainty and cautious consumers could weigh on order frequency and RPM.

Bottom line

Naked Wines is executing the “smaller, more profitable” playbook. HY26 shows better margins, better cash discipline, and better unit economics, at the expense of near-term revenue scale. If they keep delivering on margin expansion and cash generation while nudging growth back in a disciplined way, shareholder value should follow.