Australian Vintage Limited (AVL) has delivered a net profit after tax of $19.6m, up 79 per cent on its last full-year result and the highest profit AVL has achieved over the last 10 years.
Strong performances in AVL’s core Australia and UK businesses, as well as improved production efficiencies have help the company to achieve this result, with CEO Craig Garvin also calling out the strong sales of AVL’s pillar brands.
“The record result was very pleasing with continued growth in our portfolio of key brands,” Garvin said.
“During the 12 month period, sales of our pillar brands of McGuigan, Tempus Two, Nepenthe and BVWC grew by 12 per cent to $195.1m. This growth, together with the efficiencies generated from our recent capital spend, investment in our people and the favourable 2020 and 2021 vintages have underpinned the 79 per cent growth in NPAT. We are committed to our strategic plan, and it is showing positive signs for our future.
“During the year we have increased the investment in our brands with marketing spend up 46% with most of the increased marketing spend occurring in the second half of FY21. What is also pleasing is that because of increased investment in our staff and our continued focus on our customers, the Company was recently awarded the number one wine supplier to the Australian retail industry by the Advantage Survey. This Survey is a comprehensive balance scorecard rating of all suppliers across the marketplace as rated by the customer.”
Garvin also said that COVID-19 has had a mixed impact on AVL, with some sales increasing in major retail chains, but the company’s production facilities have seen costs increase through segregation of shifts and some challenges with supply chain operations.
He added: Whilst it is difficult to calculate the impact of COVID-19 on the business, our key strategies should continue growth post COVID-19. Increased distribution, innovation and consumer engagement is key to this growth, and we have seen this in our Australian and UK business where we are working hard with our customer partners to drive our portfolio.
“The McGuigan Zero range has been an outstanding success and demonstrated the importance of innovation to the portfolio long term. This, together with the benefits from production efficiencies is sustainable for the long-term future and not COVID-19 dependent.
“In the UK, our business performance has been very strong, driven by our investment in the McGuigan brand and continued distribution gains in major retail. The growth of sales has been impacted by the change in UK tax on wine product which resulted in a decline in our Shy Pig sales of $12.6m when compared to prior period.
“Excluding the decline in Shy Pig sales, the UK segment improved sales by 20 per cent with our four pillar brands growing by 20 per cent.”
AVL’s Australian and New Zealand segment performed well with contribution up 48 per cent to $9m. The McGuigan brand grew by three per cent, due mainly to the performance of the McGuigan Zero range which is outperforming expectation and grew sales by $5m. Tempus Two continues to grow with sales up 15 per cent, Nepenthe grew by eight per cent and BVWC grew by 19 per cent.