Xanadu Wines has sold its 44-hectare Margaret River vineyard for A$2.775m. The winery was situated 35km south of the company's winery in the area.

 

The Australian winemaker said that it had retained the Jindawarra brand and would continue to develop sales of the wine in select market segments around the world. The company said it had contracted a portion of the Jindawarra vineyard fruit to ensure consistency of the brand is maintained.

 

Xanadu said the cash from the sale would be used as working capital to further develop markets as well as retiring debt.

 

In a statement to the Australian Stock Exchange, Xanadu's board of directors also said that it expects to report an operating loss for the first half of the year to 30 December. The result is below expectations and will affect the previously disclosed full year forecast of returning to profit in full year 2005, the company said.

 

"The higher than anticipated loss is due in the main to the lower than budgeted sales and margins in the November and December 2004 months and higher than anticipated foreign exchange losses in the first half of the financial year," the statement said.

 

Xanadu said it had shipments and forward orders in the system totalling more than A$5.65m. These are against a budget for the first quarter of A$6m. The company said it is confident of writing its budgets for the second half of full year 2005.

 

Sam Atkins, managing director at Xanadu, said: "Unfortunately sales have slipped in November and December against budget and this has cost the company in our two busiest months of the year. This has required urgent attention as reflected by the current orders on hand. I am very disappointed in this downgrade, yet I still remain confident of producing a profit in the second half of 2005."