Mcguigan Simeon Wines has recorded a 10.8% fall in full year net profits, despite a rise in revenues as unfavourable trading conditions continued to hit Australian winemakers.

The company reported net profit of A$35.9m in 2004/05 on the back of revenues of A$377m, up 16% on the previous year.

The leap in revenues reflected good growth in exports. Total export sales, bottled and bulk increased 34% in dollar terms with significant increases in the UK/ Europe and the US. Export sales volumes were up 40%.
But margins continue to cause problems.

"The overall market will continue to be very competitive with unfavourable exchange rates and oversupply affecting all market sectors, especially exports," McGuigan chairman David Clarke said in a statement.

"We do not see this situation changing significantly in the next two years."

Company managing director Brian McGuigan said he was "disappointed " at the results.

He said: "While I am disappointed with the outcome for the full year, the underlyging principles of good management a low cost structure and income diversity have underpinned the company's result this year and will continue to do so in the immediate future."

Looking forward, Clarke said: "Our trading results for the first two months are in line with last year. The overall market will continue to be very competitive with unfavourable exchange rates and oversupply affecting all market sectors, especially exports. We do not se this situation changing significantly in to years.

"We will continue to look at acquisitions is it is clear that they will add to shareholder value. While we continue to be confident in our long term future, in the absence of more favourable market conditions, the best we can foresee in the 2005-2006 financial year is net profit before significant items in line with or marginally down on this year."