Naked Wines offers up to £5.7 million buyback at a 27% premium

Naked Wines plans to return cash to investors through a share buyback of between £2 million and £5.7 million and said trading through the financial year to date has stayed in line with its full-year targets, according to a regulatory filing released on Friday, November 6.

The UK-listed online wine seller said it wants to repurchase ordinary shares at a fixed price of 80 pence each through a tender offer. That price is a 27% premium to the 63 pence closing price on Thursday, November 5. The company said the final size of the offer will depend on trading during its peak pre-Christmas selling period, which is the most important stretch for its annual results.

Naked Wines said the offer would cover a minimum of about £2 million and could rise to about £5.7 million, or as many as 7.1 million shares. That would equal about 10.72% of the shares in issue, excluding treasury shares. The board said it expects to decide the final number of shares to be bought on December 8, when shareholders are due to vote on the plan at a general meeting in London. Completion is expected on December 16.

The company said it chose the tender route because it continues to generate cash and believes it has surplus capital that can be returned to shareholders. It also said the board weighed the company’s share price against its capital allocation standards before deciding on the proposal. If trading is in line with or above the midpoint of its net cash guidance, the board said it intends to accept tenders worth about £5.7 million. If trading falls within the lower half of that net cash range, it said it would aim for a buyback of about £4 million.

Alongside the tender announcement, Naked Wines gave an unaudited trading update ahead of its half-year results for the 26 weeks ended September 28, due on December 11. The company said revenue for the year remains on track with earlier guidance of £158 million to £175 million, even as sales are expected to decline from the prior year. It reaffirmed adjusted EBITDA guidance of £7.6 million to £9.0 million and net cash guidance, excluding lease liabilities, of £34 million to £42 million. The company said that net cash outlook was stated before the proposed tender offer and will be adjusted after any buyback is completed.

The update pointed to better profitability in the business model even as customer acquisition remained subdued. Naked Wines said the customers it is bringing in are of higher quality and that acquisition payback is tracking toward its 24-month goal. It said member retention improved to 79% from 76% a year earlier, while gross margin rose to 21.7% from 19.5%, helped by price increases. Net cash excluding lease liabilities stood at £34.0 million at the end of the half, up from £33.4 million at the end of the previous fiscal year, despite what the company described as the normal inventory build ahead of the holiday trading period.

Those figures matter beyond one company’s shareholder payout. Naked Wines operates a direct-to-consumer wine model and funds independent winemakers upfront, so its retention, margin and cash trends offer a useful signal for the broader drinks industry. Higher margins and stronger repeat purchasing may suggest that premium online wine sales can still improve profitability even in a softer demand environment, while the company’s continued caution on new customer volumes shows that growth remains selective.

The company also disclosed steps to manage ownership changes tied to the tender offer under UK takeover rules. A group of shareholders treated as acting in concert currently controls about 28.09% of the voting rights. Naked Wines said Chapters Group AG and Monega Kapitalanlagegesellschaft mbH, acting for the Truffle Fund, have each agreed to tender at least their basic entitlement. That is meant to keep the group’s combined voting rights below the 30% threshold after the transaction, at about 29.94%, so no waiver under Rule 9 of the Takeover Code is required.

Naked Wines said Jan-Hendrik Mohr, one of its non-executive directors and the chief executive of Chapters Group AG, took part in board discussions on the tender offer but was excluded from decisions on the size of the offer and the tender price because of that connection. The board said it believes the tender offer and the related share repurchase are in the best interests of the company and shareholders as a whole, and it is recommending that investors vote in favor of the resolution needed to proceed.

A circular setting out the full terms of the offer was due to be sent to shareholders on Friday, November 6, and posted on the company’s website. The general meeting is scheduled for December 8 at the offices of Panmure Liberum in London. The tender offer is due to close on December 10, with the result expected on December 11. Naked Wines also said it will host an investor presentation on December 15 after publishing its half-year results.