Australian Vintage has recorded widening half-year losses – citing one-off impacts and exchange rates – and said the company is “on track” to meet its forecast for sales growth across the year as a whole.
The wine group booked a net loss of A$21.9m ($15.4m) for the six months to 31 December, compared with a loss of A$473,000 a year earlier.
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Earnings before interest, tax, depreciation, amortisation and SGARA (EBITDAS) was a loss of A$268,000 versus a positive A$11.1m in the first six months of the previous financial year.
“Reported EBITDAS for the half was break even, a decrease of A$11m over the prior year,” the McGuigan brand owner said.
“Contained within this movement are a number of one-off impacts with the major variance from the accounting impacts of exiting another vineyard lease, in line with strategic inventory rebalancing, and a foreign exchange impact on the balance sheet from a strengthening Australian dollar, representing circa A$9m of this variance.”
Australian Vintage’s first-half EBITS swung to a loss of A$7.5m from earnings of A$4.2m in the earlier period.
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By GlobalDataRevenue came in at A$123.9m, down 1.7% on the first half of the company’s 2024/25 financial year.
Australian Vintage said it was look to “move aggressively” on its range and on its geographic expansion to “better position the business and portfolio for success”.
The company wants to make the business less “reliant” on “red-heavy” products sold for less than A$10.
It pointed to its move in May to buy the international ownership rights to the MadFish brand, which expanded its UK range into lighter and more expensive wine. In December, Australian Vintage signed a deal to distribute for New Zealand peer Invivo in the UK and Ireland.
Revenue in the combined Australia and New Zealand markets rose 2.3. The company counts the countries as one of its two “core markets”. In the other, the UK, revenue fell 6.5%. However, revenue in North America grew 18%.
In its results filing yesterday (19 February), Australian Vintage said the “bulk wine market [is] no longer a viable option for selling excess inventory due to ongoing market overhang and low pricing”.
As a consequence, the company said it is “focused on executing the inventory reduction plan, while exploring acceleration opportunities”. It added: “Further to this, capacity optimisation opportunities at the Buronga Hill Winery are currently under review.”
Overall, Australian Vintage said it is “on track to deliver in line” with its forecast
for sales growth for the full year and “achieve cash-flow neutral, excluding investments”.
The company’s cash flow in the first half was affected by increased investment, higher interest and retailers delaying payments. However, it is forecasting higher cash inflows in the second half from sales, boosted by NPD and acquisitions, as well as deleveraging working capital.
