Australian Vintage strategy “working” in “toughest operating environment” – results data

A combination of macroeconomic challenges and bumper harvests have hampered Australian Vintage in its most recent financial year.

Sales from the 12 months to the end of June were “in line” with the corresponding period a year earlier, with fiscal 2023 declining in sales terms by 1%. The group remained upbeat, however, noting that sales last month leapt by 16% on July 2022.

The results indicate a consistent performance throughout the year after first-half sales came in flat at -0.6%.

In the UK, which along with Europe accounts for almost half of Australian Vintage's sales, the company identified an opportunity for its no- & low-alcohol activities from the introduction this month of duty based on alcohol content. The group has been busy in the segment and claims to have "global leadership" in no & low through wine brands including Not Guilty.

Elsewhere, Australian Vintage outflanked its peer, Treasury Wine Estates, in its level of optimism towards the potential removal of tariff barriers to Australian wine in China. The company, which described the matter as "the anticipated China opening", said it has been proactive in the market ahead of any future decision by the country's authorities.

Whilst noting "one of the toughest operating environments in decades" in fiscal 2023, the McGuigan brand owner also highlighted the two bumper grape harvests in Australia in 2021 and 2022. This year's harvest, however, was particularly poor, leading to a non-cash writedown for its production operations of around AUD9m.

Finally, on last month's strategic review announcement, said the matter is ongoing and has "reinforced the need for industry rationalisation".

“Our strategic plan is working," said CEO Craig Garvin. "The relentless pursuit to drive our 'pillar' brands, innovate and expand geographically has shored up our platform for future growth. Fiscal 2023 saw us absorb significant inflationary costs and realign our business to be a lower-cost producer. This sets us up well for fiscal 2024 and beyond."

The company also noted in its results statement that a B Corp audit is scheduled for later this year.

Australian Vintage's official fiscal 2023 results announcement.

Group presentation on recent performance.

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