TREASURY WINES UNCORKS SWEET $269M PROFIT DESPITE INVENTORY WOES
Written on the 17 August 2017 by Paris Faint
REVEALING the fruits of its past year of labour, Treasury Wine Estates (ASX: TWE) has posted a 55 per cent increased net profit result of $269.1 million for FY17.
The company reported EBITS growth across all its domestic and international markets with Asia and the Americas its star earners, amassing $150 million (up 47 per cent) and $189 million (up 44 per cent) respectively. Net sales revenue also increased by 11.3 per cent to hit $2.4 billion.
The company was also buoyed this year by the performance of its Diageo Wine assets, which cost USD$600 million (AUD$754 million) to acquire back in October 2015.
CEO Michael Clarke says the company is pleased with its overall performance despite inventory difficulties with relation to some of its higher-end products.
"I am delighted to report a strong FY17 result, highlighted by robust earnings growth across every region," says Clarke.
"This result was delivered despite continuing to sell through short vintages of luxury and masstige wine, and highlights our continued focus on strategic customer partnerships in all our markets, significantly enhanced sales and marketing execution, and optimising our cost base."
In the year ahead TWE says it will continue transitioning away from its traditional focus on agriculture to become more of a brand-led and high-performance business.
It will also focus on increasing its inventory of high-end wines as a part of its supply chain optimisation strategy which is expected to continue through FY20.
"Delivering revenue growth and margin accretion over time remains a priority," says Clarke.
TWE shares closed on Wednesday at $12.58.
Business News Australia
Author: Paris Faint