Naked Wines plc (MWJ.F) Earnings Call Transcript & Summary

Good morning, and welcome to the Naked Wines plc full year results investor presentation. [Operator Instructions] I would now like to hand you over to CEO, Rodrigo Maza. Good morning to you.

Hello, everyone, and welcome to our FY '25 results presentation. We are very grateful for your time. I'm Rodrigo Maza, Naked's CEO. I'll be presenting today, along with Dominic Neary, our Chief Financial Officer. Here is the agenda that we'll cover this morning. Before we get into the details, a few headlines to set the stage. We have delivered a strong FY '25 performance, hitting the guidance we set at the start of the year. We continue to see a compelling investment opportunity in Naked, and we're commencing ongoing shareholder distributions. We've realigned the business to win with tangible progress on both acquisition and retention. Looking ahead, we're excited about the year to come and expect continued profit growth as reflected in our FY '26 guidance. And finally, a warm welcome to Jack Pailing as our new Chairman, and a big thank you to the Deirdre Runnette for her outstanding leadership as Interim Chair. Let's dive in. Naked is all about connecting wine drinkers and winemakers. Our model removes the middlemen, so customers get better wine for their money and winemakers earn more for doing what they do best, making exceptional wine. This direct meaningful relationship builds loyalty, drives a sense of community and differentiates us in the market. This is what our model produces. This chart leverages Vivino's data to show how Naked consistently overdelivers on quality for price when compared to traditional retail brands. This is one of our main drivers of retention. Now this is our model at scale. Naked currently connects close to 600,000 very satisfied Angels in the U.K., the U.S. and Australia with over 300 of the world's most talented independent winemakers. As stated during our strategy event back in March, we think of our footprint as an advantage. This is especially true in the U.S., where the ability to legally deliver wine to over 90% of the population is far from easy to replicate. Operating across 3 countries also protects us from overexposure to any single market or regulatory shift. That diversification adds meaningful resilience to our business. It also allows us to test things faster, accelerating our learning. By obsessing over exceeding our Angels' expectations, we make our flywheel spin. Angels will spread the word about Naked if we're consistently delighting them. And as they do, we'll see our business take massive leaps forward. Why? Because more Angels means more funds, more sales, more cash. Happy Angels means happy winemakers, happy employees and happy shareholders. While our market cap has moved up since the strategy event in March, we believe there's still significant upside ahead. Our current valuation doesn't yet reflect the strength of our balance sheet, the profitability of our core business or the long-term potential in getting retention back to historic levels. That gap between where we are and where we believe we should be represents a clear investment opportunity. And it's why we're initiating distributions via a share buyback program. Dom will share more on that shortly. That's probably the most relevant update since our strategy event for this audience. But a lot has been happening at Naked since we last spoke. Many things are worth highlighting but 3 stand out. First, we've centralized key functions of our company across markets. That's helping us move faster with clear accountability and sharper focus. We've also invested in under-resourced areas that are critical to delivering our new strategy. Second, we've fundamentally reshaped our growth approach. We're acquiring the right customers, those who truly value our proposition, and doubling down on delivering the promise of great wine at fair prices without the guesswork. Third, we've made targeted tech investments that improve our customer experience, both on-site and off. There's a lot in flight and the strategy we shared back in March is well underway. Over to you, Dom.

Thank you very much, Maza, and good morning, and it's great to be here today to provide an update on our performance in FY '25 and to update you on early results from our strategy, which we launched in March. Firstly, I'm going to take you through our financials, then I'll cover off 2 of our 3 strategic pillars: cash and profitability. So firstly, results are in line with guidance. And the first of these we're talking about today is cash, which is exactly in the center of our guidance and progressing well. That's up GBP 10.5 million on prior year despite the adverse movement in the U.S. dollar. Adjusted EBITDA -- and when we talk about that today, that's EBITDA, excluding inventory liquidation and associated costs and any adjusted items. So adjusted EBITDA is where we expect it to be and includes a number of key movements. The largest, most significant is the reduction in G&A, which we've seen of GBP 5 million. And that includes the impact of a restructure at the end of FY '24. There's also been a 20 basis point improvement in repeat contribution margin, and that reflects some early progress with our COGS initiatives, particularly in the U.S. Those are going to continue to grow in FY '26. And finally, there's a GBP 1.3 million comparative adverse variance versus prior year, but that's about prior year, which includes significantly lower LTIP charges and also has some FX favorability. Revenue is declining at 14%, but that's an improvement on the prior year decline of 18%, and this was anticipated and is in line with our guidance. It, of course, includes the impact of the normal attrition of our very, very large FY '21 and FY '22 cohorts, and it also reflects the fact that there was no Easter in the reporting period, but there were 2 Easters in the year before that. And of course, the market has been generally tough. Very briefly, to explain the significant improvement in FY '25 EBIT, that is entirely driven by the high level of adjusted items in prior year. So those are our financials, and they're in line with guidance. Moving on to our revised strategic KPIs. These are our new strategic KPIs, which are aligned with the 3 pillars of our new strategy that we laid out in March. If we start off with return to sustainable growth. Clearly, you can see here NPS is high and improving. In other words, once we have a customer, they love the experience and service they get from Naked Wines. But as we laid out in March, there is clearly a problem with acquisition costs and early year retention which, as we've explained, is clearly linked to the type of customer we have and are bringing in, and it's also how we're bringing them in. We will come back to this later, but that's clearly something we're addressing with the new strategy. Moving on to profitability. This is an area which is obviously key for us. Gross margin is going slightly backwards because it's impacted by the liquidation of stock. However, there have been early improvements in our repeat contribution margin as we focus on profitability globally and particular, in the U.S. Given the comments I gave earlier, payback is obviously no surprise and in line with what we discussed in March. However, again, there are some very early signs of improvement in Q4 with payback reaching 1.4x. However, this is off very low volumes. Moving on to EBITDA. As we talked about on the previous slide, it's where we expected it to be. And finally, moving on to cash. Cash, net cash, in particular, is doing well. And it's no surprise, therefore, that free cash flow is showing an GBP 18 million improvement. And this is primarily reflecting the inventory reduction we've seen in FY '25. Return on equity and cash remains in line with prior year. And it's important to note that we've included cash in the denominator here because it's a medium-term objective of us to make significant distributions of cash over the coming years. The rest of today's financial slides will give you an update on the first 2 pillars of our strategy: cash and profitability. And as I've said, Maza will come back to sustainable growth later. So we're going to start with cash on the balance sheet, where our medium-term view is that we will reach GBP 70 million of cash over the medium term from our balance sheet alone. So we can dive into that a bit. Cash generation has been strong in FY '25. As I've said, we are up GBP 10.5 million with net cash reaching GBP 30 million at the end of March. We also retain access to an undrawn facility, which is about GBP 27 million per day. And so good progress on cash. Inventory remains in line with our communications in March. So there's significant opportunity here, and we're going to dive into that a little bit. So really on this slide, there are 4 key messages. The first one is that -- is a reminder that we've delivered a significant GBP 36 million reduction in inventory in FY '25. And following on from that, we reiterate our target of releasing GBP 40 million cash from our excess inventory over the medium term. Now since this is mostly a U.S.-based number, there has been an impact by the movement of the U.S. dollar recently. But for the moment, we've taken the stretch to maintain that GBP 40 million number, and we will continue to deliver that over the medium term. We anticipate GBP 12 million of inventory liquidation costs as part of this, and this is what we talked about in March. But again, just to stress, that GBP 40 million target is net of these costs. So it's a GBP 40 million cash impact. And the final point is that our new winery in Sonoma, which we've moved into as part of a cost savings initiative and a simplification strategy, is also providing a moderate opportunity in B2B sales. So there's the opportunity to leverage the scale of that facility, for example, doing both storage and customer crush activity. We're seeing a moderate amount of activity here, and this should drive, again, a small amount of EBITDA, which is on top of our baseline with some impact in '26 and more going forward after that. But we're going to come back in December with an update on that. The final area in this section is our capital allocation policy. As we said in March, it is a priority to the business to redistribute cash to investors in a way that is value accretive. To this end, we're happier to announce today that we are commencing an ongoing regular distribution policy. We will, therefore, be starting a GBP 2 million share buyback. Now it is very important to reiterate that we see significant cash generation over the medium term. And as this happens, we reiterate our expectation that there will be significant ad hoc distributions, which will be in addition to our ongoing distributions, and that will happen as profitability allows. The final area today is to cover our continuing focus on profitability, which is coupled with the new strategy which is focusing on cost reduction as we continue to target EBITDA of between GBP 9 million and GBP 14 million. And to reiterate again, that includes an updated USD FX rate of $1.35 to the pound. So moving into this in a bit more detail. The first point to flag is we have a very strong and loyal core membership base. These are customers who have been with us for more than 2 years and are significantly more stable than the general membership base. So with the reduction in the level of acquisition as we are more efficient with our marketing investment, these are obviously increasing as a proportion of our base. Importantly, the contribution from these members was broadly flat in FY '25. This, of course, reflects both the relative stability of the membership in the core area, coupled with the increasing profitability we've touched about already. As I earlier indicated, we saw a reduction in marketing spend in H2 and particularly in Q4 of this year. This led to an improvement in payback in Q4 to 1.4x, but again, stressing that is off a low-volume acquisition quarter. As we communicated in March, we are focusing on a new KPI, which moves from our current 5-year payback metric to one which is focused on 2 years. We believe this is going to be a more stable KPI and, perhaps more importantly, is going to focus on achieving breakeven within 2 years, in other words, breaking even as we generate a core customer. We're going to update on this in December because for the moment, we do not have sufficient data from the new strategy to populate this KPI. So we will come back to that in December. Finally, we've talked a lot about cost today. Clearly, this has been an area of some improvement in FY '25 with the margin improvements we've talked about and the GBP 5 million of G&A reduction, which is supported by the restructure we did at the end of FY '24. However, perhaps more important is the significant progress we are making with our medium-term savings target of GBP 23 million. As we said before, we take a very rigorous approach to what we spend and ensuring that we generate an ROI from that investment because if we don't, we should be returning that cash to our investors. The headline news is that we have already delivered the GBP 50 million savings target that we set ourselves for FY '26. So if we go into a bit more detail, I've obviously already talked about the GBP 7 million of marketing savings and the efficiency we're having there. We have already actioned that GBP 7 million of marketing savings, and that was done during Q1. We've also been focusing very heavily on warehousing and logistics costs, and that's a core part of our medium-term strategy. Now we've already actioned 70% of those savings, which generates GBP 3 million of them already. And in addition, we've generated another GBP 2 million of savings largely in the COGS area, which are adding to that, so creating a total of GBP 5 million when you combine COGS and warehouse and logistics savings. And finally, of course, we've already talked about G&A savings, and we implemented action in Q1 to deliver GBP 3 million of those. This means we have already reached our target of GBP 15 million savings in FY '26 and continue to drive ahead in this area over the medium term. We anticipate ongoing improvements here, particularly in the cost of goods area, albeit a lot of those future savings are focused in the U.S., where we have significant levels of stock, and they will, therefore, take a period of time to work their way through inventory before they benefit the P&L. So thanks for your time today. FY '25 was a year of real progress where we have relaunched our strategy with a focus on cash, profitability and a new strategy, which will take us back to growth over the medium term. And now back to Maza, who will give you more detail on that growth strategy.

Thank you, Dom. Let's now talk about returning Naked to sustainable growth. But before going into details, a quick reminder of our ambition to exit the medium term with our business growing at least at high single-digit rates. Our marketing strategy is built on 2 core pillars, retention and acquisition. We are focused on retaining Angels by consistently delivering on our value proposition and on attracting customers who understand Naked, who value the model and who are more likely to stay. Both pillars are enabled by selective technology modernization, upgrades that make the customer journey smoother, our data more actionable and our teams more effective. Focusing on retention. We want it to be easy and fun for our customers to discover their new favorite wines. That starts with making our range easier to navigate and pricing easier to understand. We're introducing more accessible options to be part of everyday occasions, and we're simplifying price points to reduce the confusion that too often comes with buying wine. Price should be a helpful signal, not another guessing game. And yes, these changes are also designed to increase revenue per order by giving Angels the confidence to explore and try something new. To support that, we're expanding our credit back guarantee. We're also testing and scaling delivery options that better fit our customers' daily routines, making sure that getting your wine is as smooth as enjoying it. And we're sharpening how we use rewards to reinforce satisfaction and loyalty at the right moment. Finally, we're fully committed to bringing the magic back, and the recent U.K. tasting tour was a clear step in that direction. We welcomed over 4,000 Angels, and the feedback was outstanding. At the same time, we're seeing high levels of community engagement on the site with more customers rating more wines, helping each other discover their next favorite bottle. We are learning our way back to pre-COVID retention levels by investing in margin to rebuild customer loyalty. This tests are live, they lead to conclusive outputs, and we'll scale the ones that work. Moving on to acquisition. This has been a challenging area, but we're now almost fully focused on the channels where our target customers actually are and where we can tell our story the right way. Social will play a bigger role moving forward, and we're running ambitions -- tests across YouTube, podcasts, connected TV and cashback platforms. We are also refining our welcome offer to convert the highest-value customers more effectively and making sure their first experience with Naked reflects their needs and clearly communicates the value of our model. Finally, we're investing in the tools and systems that will let us assess ROI with speed and confidence. This discipline is critical to any sustainable growth engine. We are on a 2-year journey to restore the potential of the Naked brand and fuel profitable growth. We have meaningful tests already live in Q1, as shown here, with more to come. Now back to Dom.

Thanks, Maza. So firstly, an update on trading, and then we'll go into the guidance. Revenue is going to be in line with the guidance we'll give to the right. And it's important to flag that this includes a circa GBP 7 million reduction, which is the impact as the U.S. dollar rate moves from $1.25 to what we're assuming in our guidance will be $1.35 for the year. At EBITDA, there's also an adverse impact of circa GBP 1.2 million from this. We've already covered today the good progress we're making on savings. So I won't go into any more detail on that. And finally, of course, we'll be implementing a circa GBP 2 million share buyback as discussed, which equates to circa 3.5% of issued share capital. And importantly, this is an ongoing policy. Moving on to guidance. You can see the range of revenue there from GBP 200 million to GBP 216 million. Secondly, on EBITDA, you can see the range there from GBP 5.5 million to GBP 7.5 million. Importantly, GBP 5.5 million is essentially the same number as we've delivered in FY '25 of GBP 6.7 million. The only difference there is FX. So what we're really saying is that we will continue to see ongoing EBITDA growth over the FY '26. And finally, net cash is anticipated to close between GBP 35 million and GBP 39 million. This includes a GBP 2 million share buyback and a circa GBP 2 million impact of FX. So this is actually, adjusting for those, a circa GBP 1 million increase on what we had originally been thinking, which is reflecting slightly faster inventory liquidation than we had earlier assumed. Thank you very much, and I'm going to hand you back to Maza, who is going to conclude today.

As we close, let me leave you with a summary of where we stand. We've ended the year in a strong financial position with over GBP 30 million in net cash, which is GBP 10 million more than last year, and profitability in line with guidance. Our revenue decline is slowing and the business is stabilizing. We've realigned the organization to win. That took major change and real commitment from our teams. So I want to take a moment to thank everyone at Naked for making that happen. With the foundations in place, our focus now is firmly on execution, disciplined acquisition, retention that delivers on our promise to customers and smart, selective tech investments that make the Naked experience better every day. We're confident in ongoing profit growth in FY '26, and so we're ready to begin distributions starting with a share buyback. Finally, we're very excited to welcome Jack Pailing as our new Chairman. So let's keep building, keep delivering and keep reminding the world that wine tastes better naked. Thank you for your time.

[Operator Instructions] And Rodrigo, Dominic as you can see, we have received a number of questions throughout today's presentation. And Rodrigo, if I may now hand back to you to chair the Q&A [Operator Instructions] Thank you.

Thank you very much. Let's get started with the questions. The first one is, "How are you ensuring the environmental sustainability of your product?" Great question. Listen, at Naked, we know that our supply chain has an environmental footprint from packaging, production, shipping. And while our own direct emissions are relatively small, we're focused on tackling the bigger picture where we can make the most impact. In FY '25, we continue to report transparently under the U.K.'s SECR rules and took steps to go further, expanding our carbon accounting to cover all our international operations and improving the quality of what we call the Scope 3 data, especially around wine making and shipping and packaging. This is one -- packaging is one of our biggest impact areas. Last year, we made solid gains in reducing our packaging emissions. We also stepped up our recycling efforts, working with both winemakers and our Angels to promote sustainable practice and circular systems. And we're doing, I would say, beyond what's required. We're building a stronger approach to climate risk disclosure and governance, following the TCFD framework. So we can keep raising that bar around transparency and accountability, which are values that are central to the Naked brand. So yes, that would be my answer. And of course, you can find much more about this in our annual report. I'll move to the next question, "Has the shift towards bulk sales materially changed your customer proposition or winemaker relationships?" I think, Dom, you should take this one.

Sure. Thank you, Maza. Yes. So bulk sales, I wouldn't want to overplay the scale of this firstly. The shift towards does rather suggest something bigger than it is. So we are thinking about this in terms of maybe GBP 5 million of sales in FY '26. And the vast majority of that is going to be inventory liquidation, which is no different to anything we've been saying for the past year or 2. There is, though, quite an interesting theme, which we touched on in the presentation, which is we have a new Sonoma facility, which was acquired, put into place in order to generate meaningful cost savings, particularly in the storage area but in other areas as well. One of the potential upsides from this, which we're starting to see come through, is additional sales to do with custom crush and bulk storage. And the margins on that would be very healthy. But I just want to be clear, this is not necessarily going to be huge. It's useful money, it's useful profit, but it's not financially material. So yes, I hope that answer the question.

Thank you, Dom. Let's go to the next one, "Can you expand on the changes you've made to your acquisition strategy?" Yes. I'll take that. So our focus is on acquiring high-value customers for whom our value proposition is both relevant and differentiated. And that's meant walking away from channels that we have -- we've been historically overinvested in, channels like the voucher channel that once delivered very high volumes of new customers, but whose quality has declined very sharply in recent years. So we are walking away from those channels. At the same time, we're testing new channels where we know that our target audience is active, and we will scale the ones that deliver healthy paybacks. We've already reduced our marketing investments for FY '26 by over 33%. And given how selective we're being and how disciplined we're being around payback, it's likely that we'll unlock further savings. So in short, we are prioritizing quality over quantity and staying very disciplined in how and where we spend. Next question is, "Also, how are you adapting your proposition in the U.S. given the revenue per member is highest but membership is declining?" Yes. This is a great question. I mean in the U.S., I think one of our challenges is that because we were overstocked and continue to be overstocked, although things are getting much better, our range became quite still, right? Like we didn't have any novelty in that offer that we were presenting to our customers. And in wine, that's very important. So while we are still overstocked, we are buying some interesting wines that we know that our customers are excited with. And we are bringing small quantities of these different products, different regions from different winemakers to reignite that interest and that spark in the U.S. market. And our last couple of campaigns very clearly prove that, that's the right decision. So yes, we will continue to do that, expecting that it's going to be a retention driver in that market. Okay. I'll move to the next question, "What's the expected payback horizon on the GBP 3 million investment in engagement tools and retention programs?" Dom, do you want to take that one?

Yes. Sure, Maza. Yes. So the simple answer is it needs to be very short term. These are not big CapEx investments. So Maza touched on one earlier, the credit back guarantee, which anecdotally I've received direct feedback on, [ that I announced ], in a very positive way. The slightly more complicated answer is that payback is likely to be months, not years. So we would likely have a payback, unless we're right at the end of -- in the year. We are extremely careful to test and learn each of these, though. So we're not going to implement things and just hope they work. We're going to test them very rigorously, set clear KPIs. And once we see they're working, we will then scale them. And of course, it's early days yet, but already, we're seeing some positive benefits. What I mentioned on credit back guarantee is looking quite interesting, for example.

Thank you, Dom. Next question is, "Will the tax simplification improve your ability to personalize offer and adjust pricing dynamically?" The answer to that question is yes. We are well on our way in implementing a best-in-class CRM tool, and 2 of the main objectives are exactly the ones that are included in the question. We know that we have very loyal, long-tenured Angels. But each one of them is different, right? And their taste is different. So being able to personalize the offer we present them based on all the information that we have about them that we've gathered through the years is obviously an opportunity that we want to tap into. And pricing is another opportunity that we are taking very seriously. Our pricing position varies per market. And wine is complicated, right, in terms of the structuring of our portfolio. So yes, we are looking into how to use price in a way that helps customers make decisions when purchasing wine. I could help -- instead of price being yet another variable to figure out, making it a tool for customers to make the decisions that are right for them. And obviously, for us, it's a monetization tool that we need to take very seriously. So the answer is yes. I'll move to the next question, "When are you intending to start the share buybacks? Is this likely to be over a set period or ad hoc depending on Naked Wines' share price?" Dom, over to you.

Yes, absolutely. Thanks, Maza. So the answer is quite simply in the coming days. We are days away from it, not weeks. Is it likely to be over a set period? It will take, obviously, as long as it takes. We envisage it being a number of months. And just to reiterate that this is part of an ongoing distribution policy. So what we said in our results today and what we've been saying all week is that we intend to continue this as an ongoing policy into the future. But actually, the more interesting point is the substantial distributions that will come through at some point over the medium term. So if you think where we are today, we've got GBP 30 million of cash that's on the balance sheet. And -- but over the coming years, it's very clear that we're going to generate GBP 40 million of cash from our inventory, and we're progressing well with that. As that comes through, we will be moving to distribute that as quickly as possible to our investors. And at the moment, we're saying share buybacks because we believe the intrinsic value of the company is significantly greater than the current share price. And that is our intent, but obviously, we've also said that as the share price grows, we will talk to our investors about the best way to do these distributions. We're not going to work in a bubble. So yes, starting in the coming days.

Thank you, Dom. "What's the goal for the 5-year payback on customer acquisition investment?" Do you want to take that one, too?

Yes, absolutely. So the goal for our 5-year payback has always been 2. And we haven't achieved that for a number of years, and we certainly didn't achieve it in FY '25. Our ambition here has not changed, but our strategy has. So if you look at Q4, albeit off a low level of investment, the payback had increased to 1.4. And what we have committed to our investors is that we are not going to be wasting money on acquisition that doesn't pay back at a sensible period. The other key point is that the 5-year time horizon is, in our opinion, a very challenging one to get right and present well. And actually, the feedback we get is we really need to be focusing on the short term. So the new metric that we'll be feeding back on in December will be focused on 2 years and breaking even at 2 years. Now that is very similar to a 5-year payback target, but with obviously a much better focus on the short term, and we are operating to that. The only reason we haven't got anything for you on that yet is because this new strategy has only been running for a few months, and we just don't have enough data. We have one cohort or 1 months' cohort with some information, but it's just not enough to report on yet. So we'll be coming back in December on that with that focus on better ROI and more clarity, focusing on 2 years, and we'll do that in December.

Perfect. Then the next question, it's actually 3 questions in 1. So question number one is, "Why has Rowan Gormley stepped down as Chairman? Will he remain as a shareholder?" Question two is, "Why has the buyback been so small and no excess capital paid out with so much cash currently on the balance sheet?" And question three is, "How long will it take for Naked to return to revenue growth? Is it possible in FY '27?" So I think I can take the first question, Dom. You should take the second one and then we decide -- probably best if you take the third one as well. But let's start with question number one, which was why has Rowan stepped down as Chairman. Will he remain a shareholder? So Rowan is the founder of our company, and he came back to Naked at a time of need, right? He was instrumental in stabilizing the business and setting the stage for future growth. And we are certainly very, very grateful to him because of that. The decision for him to step down as Nonexecutive Chair happened after we shared our new strategic plan with the market. And I think his departure marks a natural transition, right, as we shift into a new phase of the business and we take on that under fresh leadership. As I said on the presentation, we're very thankful for Deirdre for stepping up as our Interim Chair, and we're now very excited for Jack Pailing to be taking that position moving forward. So that's the answer. While Rowan has stepped away from his Board role, he remains a Naked shareholder and continues to care very deeply about Naked's long-term success. Dom, I'll repeat the second question, "Why has the buyback been so small and no excess capital paid out with so much cash currently on the balance sheet?"

Thank you, Maza. Yes. So if -- the starting point for this is a couple of years ago. As I'm sure you're aware, the business had strong liquidity challenges a couple of years ago and had to work very hard working with its financial partners to progress from there to a point where we are now commencing distributions -- ongoing distributions for the first time. The scale of the buyback is moderated, and that is because we are having to work with payment processors and our bank. And we're having to do things in a way. Now the good news is that our creditworthiness is clearly improving, and that is very clearly evident from the conversations we're having with our partners. But we don't want to just go too suddenly and start causing problems on their end. The good news is that the cash that's coming through now is going to be generated, yes, from EBITDA, but primarily from inventory. And there, we have certainly enough cash in the business today. So our expectation is that over the medium term, we will be making substantial distributions as well as the ongoing policy, which is sustainable and will be progressing over the coming years. And Maza, shall I take the next one as well, which is how long will it take for Naked to return to growth -- to revenue growth? Is it possible in FY '27? So again, I'm not going to move away from what we talked about in March here. We have committed -- we've said that we are targeting to exit the medium term with 5% to 10% revenue growth. And the medium term in these terms is 3 to 5 years. The -- in FY '27, I think it will be extremely challenging for us to get back to growth. And the reason for that is numerous, but really 2 things. Firstly, we are still seeing the impact of the very large acquisition volumes of customers in FY '21 and '22. And whilst those are attriting at the normal percentage levels, the scale of those cohorts, which were 3x -- something like 3x normal scale, means that the membership base, as we've explained before, will continue to reduce certainly related to those cohorts for the next few years before it becomes much more stable and that impact lessens. So that's point one. The other point is we've been very clear that we are focused on EBITDA and cash. That means being very careful about the level of acquisition investment. So if we were wanting to get to growth in FY '27, we would have to spend a lot more marketing investment, and we wouldn't be doing it with paybacks that our investors would be happy with. So we're very clear, we're focused on EBITDA and cash. We see returning to growth over the medium term. It's unlikely to be by FY '27, but that doesn't mean, and quite the reverse, you will be seeing progressive growth in EBITDA profitability over that period year by year.

Thank you, Dom. And we have a last question. I think you've answered it, but the question is, "Are you considering B2B sales in your bulk approach?" Anything you'd like to add?

Yes. I think as I interpret this -- or I'll interpret it slightly differently to my previous answer. So I assume what this means is we have large amounts of excess inventory in the States as I think it's no surprise to anyone. Chunks of that are, of course, bulk. Are we considering using that in our B2B sales? And I assume that assumes private label sales and things like that. And the answer is yes. There is a limit to how fast we can scale that. And -- but yes, absolutely. Again, I don't think this is going to be beyond the normal inventory liquidation, which we're anticipating. I don't think there's anything hugely material in the next couple of years, but we are certainly looking at that, and there are some interesting signs there.

Perfect. That was the last question. Thank you so much for asking. As a final remark, I'll go back to some of the key messages for us. So we closed FY '25 in a strong financial position with over GBP 30 million in cash, which is up over GBP 10 million year-on-year, with profitability in line with guidance and revenue decline slowing. In the first months of FY '26, we've realigned our organization to win. That's taken major change and real commitment from the team. So I want to thank everyone at Naked for making that happen. We have the right foundations in place, and our focus is now on execution, disciplined acquisition, retention that delivers on our promises to customers and selective tech investments that make the Naked experience better every day. We are confident in continued profit growth in FY '26, and we are already commencing shareholder distributions beginning with the share buyback. We thank you very much for your time and look forward to talking to you soon. Goodbye.

Fantastic, Rodrigo, Dominic. Thank you very much indeed for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the team can better understand your views and expectations? This will only take a few moments to complete and I'm sure will be greatly valued by the company. On behalf of the management team of Naked Wines plc, we would like to thank you for attending today's presentation, and good morning to you all.