Full-year profits soar for Treasury Wine Estates as turnaround continues

Treasury Wine Estates has followed its "reset" year in 2015 with a strong set of results for fiscal-2016.

The company which saw losses turn to profits in its previous fiscal year, saw the bottom line in the 12 months to the end of June soar, coming in 131% up year-on-year at just under AUD180m (US$137.9m). The 12-month numbers, which also saw net sales jump by 20%, come on the back of double-digit increases in sales and profits in the first half of the year.

On a constant currency basis, net profits were up by 56%.

Stripping out the performance of Diageo's former assets that Treasury acquired for US$552m in January, sales were up for the group by 9.4%. While total operating profits rose by just over 50%, EBITS minus the Diageo purchase increased by 16%. The company said that the integration of assets is "largely complete".

Diageo brands need "fixing and nurturing" - Treasury Wine Estates CEO

Today's results signify a turnaround for Treasury, which two years ago took an AUD260m impairment charge. A year earlier, the group recorded an AUD160m writedown as it struggled to stay afloat. In mid-2014, several private equity companies approached Treasury about a possible takeover.

"Our F16 result demonstrates that momentum across our business is accelerating," said CEO Michael Clarke today. "TWE is now delivering consistent earnings growth and margin accretion on a more balanced, sustainable and quality earnings basis."

Shareholders welcomed the results: At the close today, TWE's share price was up over 11% on yesterday.

To read the company's full results, click here.

For a look at Treasury Wine Estates' full-year performance on a regional basis, click here

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