WINE major Australian Vintage has posted its first annual profit in three years and forecast further growth despite turmoil among its major competitors.
The company, which this year changed its name from McGuigan Simeon, reported a profit of $1.3 million for the 12 months to June 30, a $7.3 million turnaround from the previous year.
While sales revenue at $265 million was down 7.6 per cent, chief executive Dane Hudson said total sales of branded wine were up 10 per cent, while exports of branded wine were up 22 per cent.
Over the past two years, AVL has steadily reduced its reliance on low-margin bulk wine sales to concentrate on the more lucrative branded premium sector.
Asked whether AVL had put losses behind it for good, Mr Hudson replied: "I hope so. Clearly the market continues to be a challenge. There's a lot of uncertainty on the currency and with some of our competitors and what they may do with written-down stock, but we expect to have a small profit growth this year.
"The industry headwinds will continue, with the Australian dollar at a high level, ongoing drought conditions and structural oversupply in the Australian market."
Foster's, Australia's biggest wine company, this week flagged a fire sale of excess wine inventories after asset write-downs in its global wine business cut annual profit by $603 million.
Meanwhile, Constellation Brands, owner of Hardys and Banrock Station, has announced plans to sack up to 350 staff and cull hundreds of products from its portfolio after the impact of the stronger Australian dollar slashed export earnings.
Mr Hudson said he would not be interested in buying any of the Constellation winery or vineyard assets, as they were to be sold without their associated brands.
Australian Vintage chairman David Clarke said the outlook remained uncertain but the company was expecting "a small growth in our operating profit for the full year, subject to no further material change in conditions".