AUS: McGuigan requests trading halt amid inventory review
McGuigan Simeon Wines is reviewing its inventory levels after another record vintage in Australia.
The country's third-largest wine producer yesterday (29 May) requested that trading on its shares were halted, adding that it was reviewing its stocks. Managing director Dane Hudson said the company had yet to finish its review but would make an announcement tomorrow.
"We were comfortable with our stock level in December," Hudson said. "However, the impact of another record vintage on top of previous excess stocks in the industry meant it only prudent we closely review the value of our stock."
Reports in Australia have suggested that McGuigan Simeon could announce a write-down worth over A$40m (US$30.5m) and downgrade its profit outlook for the third time in 13 months.
In February, McGuigan Simeon saw half-year earnings hit by margin pressures as it posted a 41% slump in earnings. Revenues fell 6% as rising exports, particularly to the UK, were not enough to offset a fall in domestic sales.
However, company founder Brian McGuigan told just-drinks earlier this month that the company was "performing better than anyone else in the Australian wine industry".
He said: "In 2005, we were only A$4m under our 2004 results but A$300m was taken off our capitalisation. The situation in the industry is glum and expectations have gone the same way and people write down shares. In total our sales were around A$400m, which is pretty good, given the age of the company and an environment where there is discounted stock."
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