Australian Vintage books $1.3m profit
Australia's third largest winemaker, Australian Vintage Ltd, has returned to the black but its dividend drought remains.
Formerly McGuigan Simeon Wines Ltd, Australian Vintage booked a $1.3 million net profit for the year to June 30 compared with a net loss of $5.9 million in the previous financial year.
It booked a $5.5 million net profit after tax before significant items - up $7.3 million on its 2007 performance - on a 7.6 per cent drop in revenue to $265.0 million.
The maker of the McGuigan and Tempus Two brands, which changed its name in January 2007, has not paid a dividend since December 2005.
The company on Wednesday flagged an expected "small growth" in its 2008/09 operating profit subject to no further material change in conditions.
Earnings per share were one cent, up from a loss of 4.8 cents per share for 2006/07, while net tangible assets softened from 2.13 cents per share to 2.09 cents per share.
Declines in revenue from the private label wine division and bulk wine and processing unit hurt top-line revenue, while total branded sales rose 10 per cent on higher margins.
Exports of branded wine increased by 22 per cent.
Australian Vintage restructured its asset portfolio, offloading its Griffith and Hunter Valley assets for $20 million, the company said in a statement.
A wine glut in the local market, together with softening demand for Australian wine, the impact of the drought, and the strong Australian dollar pointed to a "particularly tough" 2009 for the wine industry, said Australian Vintage's chairman, David Clarke.
"We face an uncertain 12 months," he said.
The outcome of competitors' restructuring and asset sales would weigh heavily on the industry in the medium term.
"We anticipate that the market will continue to be volatile with softening demand for wine in Australia, and fierce competition in all of our markets.
"The economic conditions in the UK, in particular, and the US are also likely to impact demand," he said.
Barring material change in current conditions, the company says it expects a small change in profit in 2008/09.
Shares in Australian Vintage were trading one cent higher at $1.05 on light turnover at 1255 AEST Wednesday.