TWE More than Doubles its Net Profit After Tax and Earnings Per Share

Treasury Wine Estates Ltd (TWE) has just announced its interim 2017 financial result, more than doubling both its Reported Net Profit After Tax (NPAT) at $136.2 million, and its Earnings Per Share (EPS) at 18.5 cents per share, from the previous corresponding period.

The Company also reported an increase on Earnings Before Interest, Tax, SGARA and material items (EBITS) of $226.8m, up 58.8 per cent on a reported currency basis.

TWE reported its EBITS margin accretion up by 4.3ppts to 17.5 per cent in 1H17, and up 2.5ppts relative to TWE’s F163 EBITS margin of 15 per cent, which included 6 months of the Diageo Wine contribution.

The Company acquired the Diageo Wine business on January 1 last year, looking to secure increased access to Luxury and Masstige fruit, and hence deliver immediate portfolio mix benefits for TWE’s US business. The acquisition has proved fruitful, as reflected in TWE’s America’s EBITS growth of 75 5.4 per cent to $90.7m and an EBITS margin of 16.0 per cent.

In Australia & New Zealand alone, the Company a 13.2 per cent EBITS growth to $53.1m and an EBITS margin of 16.4 per cent, driven by above-category volume growth in Australia, marketing and in-store activation, strengthened customer partnerships and a low cost culture.

The Board declared a positive interim dividend result for TWE shareholders of 13.0 cents per share; representing a 5 cent per share increase and a 64 per cent payout ratio.

TWE’s Chief Executive Officer Michael Clarke commented, “I am delighted to report a strong interim 2017 financial result highlighted by further margin accretion, excellent cash conversion and outstanding EPS growth, despite the higher share base. All regions delivered double digit EBITS growth and importantly, growth was delivered sustainably”. 

TWE expects 2H17 to be broadly in line with 1H17, absent of any significant fluctuations in foreign exchange rates. 

By F18, TWE expects to deliver a high-teens EBITS margin and an enhanced value to its shareholders through its improved Returns On Capital Employed.