Challenger Wine Trust has posted a healthy set of results for its latest fiscal year.

The Australia-based trust said today (7 August) that operating profit before tax rose by 12% year-on-year to A$16m (US$14.5m), as revenue was up by 11% to A$32.7m. Net profit at the company leapt by 72% to A$13.5m.

"This is a strong result for CWT underpinned by a re-aligned property portfolio following a number of transactions during the financial year," said CWT's fund manager, Nick Gill. "The result also highlights the underlying strength of the agricultural sector, especially for a diversified portfolio in the Australasian vineyard sector."

The company said that the 2008 vintage year was "challenging for both winemakers and grape growers" in Australia. "The industry initially anticipated a shortage of grapes due to the perceived lack of available irrigation water, resulting in an early season crop forecast of 1.2m tonnes. This created some concern that there would be a shortage of grapes prompting wine companies to offer higher contract grape prices to ensure supply.

"As a consequence of these price signals grape growers diverted irrigation water from other agricultural industries and purchased substantial temporary irrigation water. As a result of these water purchases and favourable climatic conditions across most grape growing regions in Australia, a crop of 1.8m was harvested, up on the 2007 frost and drought-effected harvest of 1.4m tonnes.

"As a result of this larger than expected grape harvest, grape prices in some regions and for some varieties fell significantly."

Moving forward, CWT said it was reviewing options following advice from Australian Vintage that they will not be re-leasing Bethany Creek & Vine Vale Vineyards - the lease for which expires in October - and Cowra Vineyard, which expires in April next year.