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Naked Wines boosts revenue forecast on lockdown drinking
London-listed Naked Wines (WINE.L) raised its full-year sales forecast on Thursday after revenue rose nearly 80% in the first half as more households bought wine online during the coronavirus lockdowns.
It posted revenue of £157.1m ($211.04m) for the 26 weeks ending 28 September, compared with £87.5m a year earlier.
The business benefited greatly as restaurants and bars were closed due to government restrictions earlier this year. It recorded a boost in sales and even had to temporarily suspend orders in March following unprecedented traffic on its website.
"Naked Wines is a bigger, better business than it was twelve months ago,” said Nick Devlin, group chief executive. “The last six months have been a critical period in the development of the company. We have delivered exceptional growth and a permanent step change in scale and efficiency for the organisation. We have a business today that is not only larger, but structurally improved and ideally positioned to deliver sustained growth in the coming years.”
The business also benefited from strong sales in the US, becoming the largest direct to consumer wine business in the US by volume.
Devlin added that despite economic uncertainty, “we move into the second half with continued trading momentum, supported by a strong cash balance and with conviction in the potential to unlock further growth opportunities in all our markets.”
B&Q and Screwfix owner Kingfisher (KGF.L) has seen its sales leap 17.2% in the three months to November.
CEO Thierry Garnier attributed the boom to strong DIY demand during the coronavirus crisis, “as consumers spent more time in their homes and focused on improving them.”
B&Q sales in the UK and Ireland were up by almost a quarter, with particularly strong demand for “weather-related” outdoor goods, with a heatwave in August. The figures were released in a trading update on Wednesday.
Meanwhile, strong sales to tradespeople boosted sales at Screwfix. It came as the construction industry benefited from strong pent-up demand after the first UK lockdown eased over the summer.
Screwfix opened 17 new UK stores in its third quarter to 31 October, and another four in the Republic of Ireland.
The pound dipped on Thursday on reports European leaders are demanding the EU ramps up its no-deal Brexit planning for the end of the year.
Several national governments are said to be increasingly frustrated that the European Commission has not yet published its contingency plans. “It is high time to prepare people and businesses in case we cannot fix an agreement in time,” said one senior EU diplomat quoted by the Times.
Negotiations have gone down to the wire between Brussels and the EU over a trade deal once Britain’s transition period expires at the end of the year. The UK left the bloc at the start of 2020 but temporarily retains full market access and other rights.
Firms and economists including government forecasters expect severe short-term disruption and long-term economic damage if no deal is struck, which could mean the abrupt imposition of tariffs, quotas and other administrative burdens.
The pressure for greater no-deal planning appears to have added to investors’ concerns about the chances of an agreement being reached, with sterling slipping slightly on Thursday morning.
The pound has made gains since early November on rising hopes of an agreement. But it was trading 0.4% lower against the dollar (GBPUSD=X) at just over $1.32 at around 9am in the UK on Thursday. It was only down around just over 0.1% against the euro (GBPEUR=X) at just under Є1.12, however.
Markets are rejoicing over various COVID-19 vaccine trial advancements, but the immediate toll of the pandemic — both economic and physical — was still causing concerns on Thursday.
The US reached 250,000 coronavirus-related deaths. Fatalities also hit their highest levels since April in Italy and Turkey on Wednesday, while cases in Germany, the UK and France appear to have reached a plateau. Coronavirus-related mortality rates are rising again in Spain as well.
US markets closed weaker on Wednesday as COVID-19 restrictions continue mounting. New York City is now closing its public schools amid rising cases.
Asian markets were subdued at market close. Japan’s Nikkei (^N225) rose 0.4%, the Hong Kong Hang Seng (^HSI) was up 0.1%, and the Shanghai Composite (000001.SS) lost 0.2%. South Korea’s KOSPI (^KS11) fell 0.2%.
With additional reporting from Tom Belger
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