Australian Vintage revenue remains strong despite difficult trading conditions

February 21, 2024
By Cody Profaca

The Australian Vintage Ltd (AVG) half year results have revealed a strong performance despite facing tough trading conditions in both national and international markets. The results, shared in an ASX statement today, reveal margin and underlying earnings improvement, with its total revenue of $136 million in line with previous year.

“Our result is in line with our expectations,” said Chief Executive Craig Garvin.

“Given the trading environment, and the challenging industry conditions, I am very encouraged we have been able to maintain revenue in line with the prior year and improve earnings in contradiction to industry trends.”

AVG grew by +2% in Australia and New Zealand whilst the overall market receded by -5%. It also demonstrated a significant 15% growth of branded sales in Asia, and has continued to show strength in its no and reduced alcohol ranges both domestically and abroad.

“We are the global leaders in no-and-low with our McGuigan Zero product number 1 in the UK, Ireland, Australia and NZ,” said Garvin.

“In APAC our sales of no-low have increased by +15% over the prior year.

“We have launched Mid Strength on shelf in the UK and early signs are encouraging of consumer pull through.”

In the report, Garvin attributes AVG’s success to its focus on efficient brand investment, innovation, and cost out measures. 

He also recognises AVG’s B Corp certification achieved during the reporting period, a strong step forwards towards achieving its sustainability targets for 2040.  

“Achieving this certification is a significant independent validation of our high Environmental, Social and Governance (ESG) standards,” he said.

The half year report noted AVG’s EBITDAS at $16.5 million and its EBITS at $8.6 million, both over $3 million than the prior year. Similarly, its NPATS of $4 million is almost double that of the year before. 

The report finishes by stating that the AVG business model is in a healthy position moving forwards. As with the rest of the Australian wine industry, it is hopeful that tarrifs on Australian wine in China will be lifted over coming months. It is also looking to emerging markets such as the Middle East and India as strong opportunities. 

“We have invested $2m in transformational costs, including consultancy fees, redundancies and full market review as announced last year,” said Garvin.

“As cost reductions occur, I am confident we are taking the right steps to improve performance in an extremely challenging market.”

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