By James Atkinson

Australian Vintage’s new Chinese distribution deal with COFCO Wines and Spirits Co will provide a solid platform for the winemaker to grow sales across the whole McGuigan portfolio, according to CEO Neil McGuigan.

McGuigan said the COFCO deal capped off a solid year for AVL, which reported a full-year net profit result of $10.5 million, up 49 per cent on the previous year, due mainly to lower financing costs.

"The growth in net profit is very pleasing. The low vintage was a major challenge as it negatively impacted our processing margins and the income we generate from our vineyards,” he said.

“Our branded business continues to strengthen, driven by ongoing and sustained growth in our key brand, McGuigan.”

AVL reported a one per cent decline in EBIT to $23.8 million due to the reduced contribution from bulk sales to North America and the lower margin from contract processing. 

Offsetting this was a significantly improved contribution from the Australasia/North America Packaged ($2.7 million), UK/Europe ($0.6 million) and Cellar Door ($0.5 million) segments.

AVL chairman, Ian Ferrier, said the business continues to focus on its three core strategies of growing branded business, growing export and maintaining low cost position.

“During the last 12 months we have achieved a successful $40 million (net) capital raising with good institutional and retail support, continued to grow our key brands and have recently announced the sale of the Yaldara winery for $15.5 million. We remain focused on improving our business even though trading conditions remain tough,” he said.

“The recently announced distribution agreement with COFCO gives me confidence that our growth in our branded business will continue to flourish.”

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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