Fears the Chinese economic slowdown would damage Treasury Wine Estates’ half-year net profit results have proven unfounded.
The company has announced its net sales revenue is up 16% to $1,507.7million, representing the largest organic growth rate in the company’s history.
EBITS up 19% to $338.3million and strong growth delivered by all regions.
Directors of the company declared an interim dividend of 18 cents a share, up from 15 cents a year ago.
CEO Michael Clarke also reiterated guidance for approximately 25% reported EBITS growth in F19.
“TWE has the people, the brands and the business models to maintain its competitive advantage in all its markets and continue to drive strong global momentum,” he said.
Clarke noted that the prospects for growth in Asia “remain highly attractive”. TWE still only holds a market share of below 5% in the imported wine segment.
He said TWE’s ambition was to expand city distribution coverage by 50%+ in the next three years, with increased allocations of luxury wine.
“Expanding distribution and growing market share in the imported wine category will support future prospects,” he added.
Australian and French brand portfolio net sales revenue in Asia was up 33% and 111% respectively.
Chief Financial Officer Matt Young revealed that there was a change in strategy for Rawson’s Retreat in Asia in F18; with volumes more evenly phased across the year in F19.
Overall, the Asian region was the standout performer for TWE, with EBITS growth up 31% to $153.1 million.
Meanwhile, the Americas division delivered a 12% rise in EBITS to $112.1 million, with US route-to-market changes described as “progressing well and on-track”.
The company said “positive, collaborative relationships” were being formed with new distribution and retail chain partners; while existing distributors continued to perform well.
Dedicated sales and merchandising teams are in place and driving improving execution, while the company has increased points of distribution in key states aligned to new distributor partners.
Australia and New Zealand saw strong volume growth of 3.8%, with EBITS rising by 13% to $77.4 million in an otherwise flat market.
TWE said the results were led by gains across the Masstige portfolio, “in particular the refreshment category”.
It added that it was ontinuing to target 25% volume and value market share in Australia; with current value market share at 22%.
