US group Vintage Wine Estates has come under fire from a raft of litigators after posting an unexpected profits slide, despite a healthy lift in sales.
The Nevada-headquartered company, which claims to be the country’s 14th largest wine producer, said late last week that sales from the 12 months to the end of June were up by a third year-on-year at just under US$294m. However, the results also featured a loss for the year of $7.9m, compared to operating profits of $9.2m in fiscal 2021.
VWE admitted the discovery of “an error in the treatment of its interest rate swap agreements”, prompting a restatement of the numbers for its prior quarter and first nine months of the financial year.
The error resulted in a marked fall in the company’s share price last week.
Following the developments, several legal firms have launched “investigations” into the matter, inviting shareholders to contact them. “Our investigation concerns whether Vintage Wine has violated the federal securities laws and/or engaged in other unlawful business practices,” one law firm said.
“We are establishing an improved accounting structure, implementing strengthened processes and controls and we are investing in our infrastructure to provide a solid foundation from which we can scale,” said CEO Pat Roney in the results announcement. “This includes a stronger accounting and finance team under a new CFO as well as the addition of several other key leadership positions.
“The processes that we have since implemented to work towards remediation of our material weaknesses drove the non-cash adjustments in the quarter.”
Founded 20 years ago, VWE has wineries in California, Oregon and Washington on its books. The company, which has its own brands as well as private-label arrangements with several US retailers, commenced its public listing in June last year.
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