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

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  • Full-year net profits more than double to AUD179.4m (US$137.4m)
  • Net sales in 12 months to end of June climb by 20% to AUD2.23bn
  • Operating profits (EBITS) jump by 52% to AUD342m
  • Volumes increase 11.5% to 33.6m nine-litre cases

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

Michael Clarke has overseen a turnaround for Treasury Wine Estates since becoming CEO in early-2014

Michael Clarke has overseen a turnaround for Treasury Wine Estates since becoming CEO in early-2014

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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