Australian Vintage Limited (AVL) has reported its results for the 2022 financial year (FY22), with share growth in all key markets and sales of its pillar brands, McGuigan, Tempus Two, Nepenthe and Barossa Valley Wine Co (BVWC) increasing to 78 per cent of total sales revenue.
The company also reported EBITS of $28.8m, eight per cent lower than FY21, driven by foreign exchange and previously announced one-off items relating to COVID-19 cellar door closures and Brexit issues in the UK. Underlying EBITS were $33.3m, up seven per cent on last year.
That overall increase in earnings saw underlying net profit after tax of $21.5m, up eight per cent.
AVL’s Chief Executive, Craig Garvin said: “Our result is in line with our expectations. Over the last two years, pillar brand sales have grown in line with our expectation, increasing to 78% of total revenue, despite global logistics challenges causing shelf out of stocks.
As announced at the half year results, the one-off non-recurring costs include the temporary closure of the cellar doors due to Covid restrictions (impacting EBITS by $0.8m) and additional demurrage and out of stocks in the UK arising from Brexit in H1 (impacting EBITS by $3.7m). Gross margin normalised for the one-off non-recurring items at 35 per cent which is an increase of 3 percentage points over the prior year, reflecting the move to higher aspirational brands in line with our strategic plan.
“Our consumer-led portfolio approach is working, reinforcing AVG’s continued investment in marketing, as we improve overall margin, product mix and market share in key geographies. Super premium and luxury brands have grown by 20 per cent since 2019 and are now contributing 13 per cent to total revenue. These brands are expected to continue to grow by 20 per cent CAGR over the next three to five years. High margin product innovation is showing significant growth on prior year including McGuigan Zero at 55 per cent, Tempus Two at 20 per cent, and Nepenthe at 31 per cent.
“Core to our strategic intent is being a global business where [AVL] will continue to invest in brands, despite inflationary pressures. We have significant growth opportunities in Asia and Canada over the next five years as we have now implemented key people and operational changes.”
Australia and New Zealand delivered an increase in branded sales of three per cent, with Nepenthe up 30 per cent, Tempus Two up 10 per cent, BVWC up eight per cent and McGuigan up three per cent.
AVL also achieved market share gains in both Australia (growing five per cent versus the wine market growing at three per cent) and New Zealand (growing nine per cent versus five per cent growth for total wine).
Garvin added: “Our strategic imperatives are on track with improvements in portfolio, market share, employee engagement, customer alignment and safety. Recently we assessed our global carbon footprint and have set an ambitious target informed by current climate science.
“Taking an evidence-based approach to achieving net zero, AVL has set a long-term target to achieve Net Zero by 2040 and developed an ESG roadmap which now forms part of our balance scorecard. Further information on this exciting initiative will be released with the annual report.”