Constellation Brands has posted an increase in full-year earnings as rising wine sales in North America and a first contribution from its Vincor International business offset challenges in the UK.

The US drinks giant today (5 April) reported a 5% lift in operating profit to US$699m for the 12 months to 28 February. Revenue rose 13% in the period to US$5.2bn.

Constellation chairman and CEO Richard Sands said the company had delivered a "solid year" of sales growth but admitted the UK market remains tough. Constellation, the largest wine producer in the UK, has suffered as the Australian wine glut has flooded the market with cheap wine.

Sands said: "Our earnings performance was somewhat challenged by competitive conditions in the UK market. However, the Constellation Brands business remains fundamentally sound." He pointed to the integration of the Vincor business and the acquisition of Swedish vodka Svedka.

Sands added that Constellation is looking to drive efficiency in the UK to boost profits from the business. He said the company is looking to bolster its presence in Europe to help offset the challenges in the UK. "We always take a long-term view and we are confident in our ability to capture growth opportunities and create value over the long term," Sands said.

However, Constellation believes conditions in the UK are unlikely to improve in the short term, despite signs that the market for Australian bulk wine is firming.

The company enjoyed a fruitful year in North America with branded wine sales up 27% thanks to the Vincor acquisition. On an organic basis, sales were up 8%. "The US and Canadian wine markets remain vibrant as we continue to see strong consumer trends for trading up to higher margin premium and high-end brands," Sands said.

US demand for Mexican beer shows no sign of waning with Constellation seeing beer sales up 15% on an organic basis. Spirits sales edged up 1%.