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Treasury Wine more than doubles profit

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Treasury Wine Estates has more than doubled full-year new profit to $179.4 million as lower costs and higher margins across its portfolio boost results.

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The winemaker behind the South Australia’s Penfolds – as well as the Australian brands of Lindeman’s and Wolf Blass – says its net profit for the year to June 30 was up from $77.6 million a year earlier while revenue was up 19 per cent at $2.34 billion.

The winemaker expects to lift savings in supply chain costs to $100 million by fiscal 20120, while its target of an earnings margin in the high teens will now be delivered by 2018, two years ahead of target

“Our 2016 result demonstrates that momentum across our business is accelerating,” Treasury Wine chief executive Michael Clarke said.

“Treasury Wine is now delivering consistent earnings growth and margin accretion on a more balanced, sustainable and quality earnings basis.”

The Americas market generated a 64 per cent lift in earnings, reflecting Treasury Wine’s continued focus on selling more high-quality wines, a six-month contribution from its Diageo Wine acquisition in January 2016, and favourable currency movements.

The Asia business lifted earnings by 40 per cent as consumer demand for imported wine brands lifted.

In Australia and New Zealand, earnings grew by 4 per cent.

Shares in Treasury Wine were 54 cents, or 5.65 per cent, higher at $10.09 at 1059 AEST.

-AAP

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