McGuigan Simeon has posted losses for its financial year as it tries to deal with what it has called a "perfect storm" scenario in Australia.

The wine company said today (22 August) that net losses for the year to the end of June came in at A$5.94m (US$4.78m), although the figure was an improvement on the A$14.84m loss posted in 2005-2006.

Sales for the year also slipped, by 8% to A$286.7m, despite an 8% lift in sales volumes, which came in at 192m litres.

The company did not declare a final dividend, in line with last year.

"The wine industry has been trying to weather a 'perfect storm' with three record Australian vintages, an oversupply of New World wine, the Australian dollar at recent highs, continuing retail consolidation followed by the lowest vintage for seven year," said company chairman David Clarke.

The company remains in a solid position with positive operating cash flow, growing strength in overseas markets and a recent proce increase taking hold, Clarke noted.

"We expect McGuigan Simeon to return to profitability this financial year," he added.

In June, the company warned that a 33% dive in its harvest this year would bring in a loss of between A$4m and A$6m for 2006-2007.

"The biggest issue facing the industry and McGuigan Simeon is the ongoing drought and lack of availability of water for irrigation," Clarke continued. "If it does not rain soon, vintage 2008 could be at least 30% below 2007.

"The next 12 months will remain challenging, but McGuigan Simeon expects to make a small profit for the 2008 year."