This morning, Australian Vintage unveiled its full end of year financial results after providing an update on its expected performance on Monday. The results highlight a solid position moving forwards for the company, and include 1% growth in revenue to a value of $261 million and a 26% growth in underlying net profits after tax. 

“Given the trading environment, and challenging industry conditions, AVG has been able to improve revenue and earnings over the prior year in contradiction to industry trends,” said Australian Vintage in an announcement to the ASX this morning.

“A relentless focus on efficient brand investment, innovation and cost out measures have seen earnings and cash flow improvement. In all key markets inflation continued with competitive aggression deflating overall shelf price and increasing the cost of doing business.”

Despite a growth in its underlying profits, Australian Vintage reported a 2,421% decrease in its statutory net profit, reflective of the turbulent year and subsequent capital raising it has recently endured.

This morning, Australian Vintage also announced the immediate retirement of Peter Perrin, who has been acting CEO since Craig Garvin was dismissed for misconduct in May.

“Peter Perrin has advised that he will step down from the acting CEO position effective immediately due to the recent diagnosis of a form of cancer,” said Australian Vintage to the ASX.

“Peter has added a great depth of experience from the wine industry to Australian Vintage. The Board thanks him for his dedication and service and supports his need to focus on his health and treatment, wishing him well on his road to recovery.”

Australian Vintage has announced that the recently-appointed Interim Chair and non-executive director James Williamson will take on the acting CEO role vacated by Perrin. Williamson is also the Chief Investment Officer of Wentworth Williamson, a substantial shareholder of Australian Vintage Limited. Williamson brings with him over 20 years of experience in financial markets including significant experience covering alcoholic beverages beverages as an analyst.

Last week, Williamson was named alongside Michael Byrne and Elaine Teh as new Board members, following on from the appointment of Margaret Zabel in July. Last week, the new team approved a strategy that it hopes will alleviate current economic pressures over the next three years, targeting a free cash flow of +$20 million and a Return on Capital Employed of +8% by the end of Financial Year 2027. 

This new strategy will feature two key approaches: to increase its stock in markets and categories where it is currently uncompetitive due to high discounting rates from competitors, and to reduce fixed grape supply and increase its flexibility of grape sourcing. 

“The market that Australian Vintage operates in is challenged by deep competitor discounting, with AVG identifying a number of revenue growth opportunities within those markets that it is currently not accessing,” said Australian Vintage in relation to its first new strategic approach. 

The new Board members will directly assist in driving this growth across Asia markets: “Mr Williamson will be Interim Chair, Ms Teh represents a key strategic partner to further drive growth across key Asia markets and Mr Byrne brings leadership and technical expertise within the logistics, supply chain and retail sectors,” said a spokesperson for the Board last week. 

Australian Vintage has already started to enact its second strategic approach, having already sold off its Barossa Valley Lyndoch vineyard and prematurely cancelled its lease on the Balranald vineyard in the Riverina. 

Australian Vintage believes that the above two actions will “result in a reduction of tax losses and the associated deferred tax asset of $10 million.”

In its end of year results, Australian Vintage says that its ongoing investments into innovation has been “key to revenue and margin growth and is a core strength of AVG.  

“Premiumisation and innovation now represent 26% of revenue and 35% of margin, a significant increase from 7% and 10% respectively in FY19, prior to the launch of McGuigan Zero,” continued Australian Vintage in its statement to the ASX.

“AVG are the global leaders in no-and-low with our McGuigan Zero product number 1 in the UK, Ireland, Australia and NZ. Globally, AVG has increased the revenue contribution from the no-and-low wine category by +20% over the prior year.”

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