Cockatoo Ridge Wines has sold one of its vineyards in Australia.

The wine company, which last month posted a 92% plunge in net profit for the second half of 2006, confirmed yesterday (13 March) that it has agreed to sell its Sovereign vineyard to Great Southern Vineyard Holdings.

Cockatoo will earn A$4.75m (US$3.7m) from the sale of the vineyard, which is based near Loxton in South Australia. The company said it will also retain the 2007 crop from the vineyard, which is worth A$900,000.

The proceeds of the sale will be used to reduce bank debt, the company said. Cockatoo also noted that it has entered a long-term grape purchase contract with Great Southern.

"As we advised recently, the two cornerstone strategies we are pursuing are to reduce debt while boosting the focus on the sales and marketing of branded products," said Cockatoo managing director Neil MacKenzie. "The disposal of Sovereign is the first step along the way of achieving the former goal."

At the same time as reporting the fall in profits, Cockatoo said last month that it has also received an offer for its Playford vineyard, which is "under consideration".