Australian vintner Treasury Wine Estates Ltd.is upping its bets on Asian drinkers.
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In North America, Treasury was raise profit by 24.4 per cent rise to $93.2 million, with the company having a hard time in the lower-priced commercial segment, but this was offset by a stronger performance in the luxury wine market.
In looking to the future Clarke added: “Our ambition is to become the world’s most celebrated wine company; a company that enriches peoples’ lives with quality wine brands”.
In March, the company said it would book $50 million in writedowns and cut an unspecified number of jobs after idling wineries and production facilities.
“This is a region that I would say has probably been scary for Treasury Wine in the past”, Mr Clarke said.
Clarke said he expected Asia to be Melbourne-based Treasury’s biggest earnings contributor within 18 months, from its current ranking behind the United States and its home market of Australia.
Collectively, the priority 15 brands delivered 13pc NSR growth for the year, with key highlights including Beringer, Wolf Blass, Penfolds, Stags’ Leap, 19 Crimes, Wynns Coonawarra Estate, Rawson’s Retreat, Pepperjack, Chateau St Jean, Etude and Matua.
Shares in Treasury Wine were 70 cents, or 12.8 per cent, higher at $6.21 at 1028 AEST.
The company found more than $40 million in cost savings in 2015 and has identified another $15 million for 2016.
Clarke said sales of the company’s priority brands were up 13 per cent, boosted by increased sales particularly in Asia. Management and the board are keen to deploy this capital in a careful and Earnings Per Share accretive manner.
Treasury, which makes Penfolds, Wolf Blass, Rosemount and Lindemans wine, produced a 53.2 per cent jump in profits in Asia, with earnings from the region reaching $73.1 million for the year through June. Sales in Asia overall climbed by 45.6 per cent to $200.4 million. But this was an improvement on the previous year’s loss of $100.9 million, which was marred by heavy one-off charges of $281 million.
While many exporters enjoyed the benefits of a depreciating Australian dollar against the US dollar and British pound, the benefits were reduced for Treasury because of its hedging positions.
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The company will pay an unfranked final dividend of 8¢ per share, up 1¢ on last year, to be paid on October 2.
