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Treasury Wine Estates sees brighter future after H1 sales rise

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Treasury Wine Estates has said it is well positioned for the rest of the year after H1 sales and operating profits increased.

TWE is cutting costs after a difficult fiscal 2014

TWE is cutting costs after a difficult fiscal 2014

The company, which is undergoing a significant cost-cutting programme, said today that net profits in the six months to the end of December were down 60% to AUD42.6m (US$21.62) The drop was caused by an AUD80.5m tax benefit in fiscal 2014 that impacted this year's comparable.

However, net sales increased by 6% to AUD882.7m in the six-month period, while operating profits (EBITS) leapt by 86% to AUD85.2m.

CEO Michael Clarke praised the performance, saying it demonstrated that the company is successfully re-setting its business.

“I am confident that the steps taken to start fixing the quality of our base business and momentum achieved in the first half of fiscal 2015 will continue in the second half and that TWE will be increasingly well positioned to capitalise on growth opportunities in both new and existing markets and channels,” Clarke said.

But, the CEO warned that the restructuring, which includes “embedding much-needed cultural change”, will take time.

Clarke has previously called this fiscal 12 months a “reset” year after TWE posted net losses of AUD100.9m (US$93.5m) in its last full financial year. The company is now looking to build and grow its luxury portfolio and reportedly sell off some of its wineries and bottling plants.

TWE's share price ended trading today level at AUD5.43 after initially dropping 4%.

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


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