Accolade Wines posts $1.7million loss

Accolade Wines Holdings Europe Ltd has released financial accounts that reveal a £104 million drop in revenue.

drinks business reports the accounts, filed at Companies House, show operating profit was down £10 million in the year to June 30, 2016.

"The losses at UK group Accolade Wines Holdings Europe Limited came despite a boost in profit from the disposal of the Matthew Clark business to Conviviality for around £80.1 million in September 2015. This boosted the company’s profit before tax to around £100.9 million, it said, however the figures show that excluding the profit from the disposal, profits from ongoing operations declined by around £16 million to £20.8 million, down from £36.8 million in 2015," db notes. 

"Revenue was down from £617.7 million in 2015, to £513.1 in 2016, with operating profit also hit, falling from £32 million in 2015 to £21.8 million in 2016."

The report said the company “continued to operate in a highly competitive trading environment, which had resulted in the reduction in revenue and operating profit,” but that the directors were satisfied the results were in line with expectations.  

The news comes a week after CEO Michael East announced his early retirement. East made the decision following the company's decision to withdraw from an IPO process.

The Australian Financial Review reported the slated float of the CHAMP Private Equity-owned company may be rebooted next year: "Sources suggested 2018 was being pencilled in for the company's run at the local bourse as the company looked to bed down an acquisition and re-negotiate prices with retailers in the United Kingdom. Sharp movements in the pound have worked against the Accolade float which was targeting the ASX to run off the coat tails of a stellar rally in Treasury Wine Estates."

John Haddock, chief executive of Champ, said the fall in the pound meant exporters were forced to sacrifice margins to stay competitive on the shelves in the UK. Hardys brand, for example, has been affected by the decision of the multiple retailers to cut lines the previous year and adopt EDLP (every day low pricing), in place of promotional discounting.

Moving forward, Jim Anderson has been appointed Executive Chairman of Accolade and will lead the company as it beds down a number of value adding initiatives. These initiatives include the acquisition of a portfolio of premium wines from Fine Wine Partners; the planned construction of a bottling line and warehousing facility in South Australia; and the ramping up of distribution and sales in China.