Wine seller Naked Wines (AIM: WINE) has announced it will commence a tender offer of between £2 million and £5.7 million, with eligible shareholders invited to tender their holdings at a fixed price of 80p per share. That’s a 27% premium to yesterday’s close of 63p and a price the shares have not seen since the end of October last year. Naked Wines said that the decision has been made in line with its capital allocation framework, with a tender offer representing an effective means of returning surplus capital to shareholders.
The structure of the offer will take into account the company’s trading performance during the peak pre-Christmas period, which has the greatest significance for the full-year results, before finalising the exact amount to be returned. The firm intends to accept up to £5.7 million if trading is at or above the midpoint of the FY2027 net cash guidance range(see below), or around £4 million if trading falls in the lower half of that range. The maximum number of shares which may be acquired is c.10.72% of the current shares in issue.
Final details will be confirmed at a general meeting set for 8th December, by which time Naked Wines expects to have a better idea of peak season trading, with eligible shareholders’ basic entitlement also to be decided. Assuming that the offer is approved at the meeting, completion is expected to take place on 16th December, just in time for Christmas.
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About Naked Wines
Naked Wines is an online wine retailer, helping wine drinkers experience better wine, made by independent winemakers. Founded in 2008, the company’s target market is discerning customers who value quality wines from independent wine makers. The business model sees so called “Angels” customers making a monthly contribution that they can then spend on the company’s wines.
Naked Wines funds independent winemakers' production costs upfront, which the firm says frees them from the financial burden of traditional production to take creative risks and make exceptional wine. Angels gain access to proprietary, award-winning wines they can't buy anywhere else, the firm offering 2,500 exclusive wines from c.280 winemakers across 20 countries.
Following the sale of Majestic Wines in 2019, the business experienced a boom during, and in the years following, the pandemic as customers stocked up on wine deliveries. However, sales have since normalised and the company has experienced challenges in customer acquisition, combined with the tough environment for discretionary consumer spending. Revenues fell from £354 million in FY2023 to just £199.1 million last year, but a new management team has set out a new profit focussed strategy.
Trading Update
Naked Wines has also provided a trading update ahead of the release of its half year results for the 26 weeks to 28th September 2026 on 11th December. Trading in the year to date is said to have been in line with guidance for the full year. The company is expecting revenue of between £158 million and £175 million for FY2027, an adjusted EBITDA (excluding inventory liquidation and associated costs) of between £7.6 and £9 million, with net cash excluding lease liabilities set to be between £34 million and £42 million at the period end.
The first half is said to have delivered continued progress on the firm’s strategy to build a better and more profitable business. Customer acquisition volumes remain low, but members acquired are said to be of higher quality.
Acquisition break-even for customers acquired in the first half is said to be tracking in line with the 24-month target, an improvement on 44 months in the first half last year and from 42 months in FY2026 as a whole. This is a result of increased member retention improving to 79% from 76% in H1 2026, and gross margin increasing by c.220 basis points to 21.7% following price increases.
Net cash (excluding lease liabilities) ended the half slightly higher at £34 million, up from £33.4 million at the end of the full year, reflecting continued cash generation, and despite the normal inventory build ahead of Christmas.
Naked Wines five year share price chart
Comment
The tender offer comes as no surprise from Naked Wines, which in the last financial year returned over £6 million to shareholders through share buybacks, repurchasing more than 10% of the company in the process. A 27% premium to the last closing share price seems like a generous offer but investors must remember that shares in Naked Wines were trading at over ten times this level just over five years ago. Nevertheless, the company now seems to be on a more solid footing under a new management team which has implemented a clear growth strategy, prioritising profits rather than sales growth.
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Disclosures
Wickes Group is not a corporate client of Optimo Research Ltd.
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