Australian Vintage takes strategic view of FY23 results

Australian Vintage Limited (AVG) has reported its financial results for FY23, with a total revenue of $258.6 million, in line with last year, despite the toughest trading conditions experienced in decades.

In spite of the flat result, Craig Garvin, Chief Executive of AVG, said the company's strategic plan is on track and has set AVG up well for FY24 and beyond.

"Given the trading environment, I am very encouraged we have been able to maintain revenue in line with the prior year of $258.6 million as we continue to improve our mix of higher margin business. As cost reductions occur, I am very confident in our future performance," he said.

AVG reported underlying EBITDAS of $26.1m, EBITS of $10.6m and net profit after tax of $4.2m, which is in line with market guidance and after absorbing $18m in pre-tax hyper-inflationary costs, largely sea freight and energy.

Garvin said he was pleased that despite "severe cost pressures" AVG has been able to grow the emerging business beyond Australian shores, growing 14 points in Asia and 9 in Ireland.

"The relentless pursuit to drive our pillar brands, innovate and expand geographically has shored up our platform for future growth. FY23 saw us absorb significant inflationary costs and realign our business to be a lower-cost producer.

"We are the global leaders in no-and-low, reflected through substantial increases in product ranging and increased market share and supported by our world leading technology. Innovation now represents 15 per cent of our total margin, which did not exist 3 years ago. When the growth in premiumisation is added, margin contribution now represents 35 per cent of our business," he said.

Describing FY23 as "one the toughest external operating environments in decades", AVG listed the declining value of wine exports, China's trade tariff, inflation, rising energy and shipping costs, the oversupply of grapes from prolific seasons in 2021 and 2022 and a reduced yield for the 2023 vintage as the main pressures.

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