Treasury profit lifted by Asia, fine wine focus

Treasury’s 16pc rise in annual profit reflects strong growth in Asia and its focus on higher end wines.

Treasury’s Michael Clarke. Picture: Bloomberg

Australian vintner Treasury Wine Estates says net profit rose about 16 per cent in the year through June, reflecting strong growth in Asia and the company’s continued focus on the higher end of the market.

Annual net profit was $419.5 million, while revenue also rose about 16 per cent to nearly $2.9 billion. Earnings before interest, tax and other items rose by 25 per cent to $662.7 million.

The company declared a final dividend of 20 cents per share, bringing the full-year payout to 38 Australian cents, up 19 per cent.

Looking forward, Treasury reiterated guidance for 15 per cent - 20 per cent growth in earnings before interest, tax and other items for the current fiscal year.

The company also confirmed the acquisition of French production and vineyard assets in the Bordeaux region in France, and announced a future expansion of its luxury winemaking infrastructure in South Australia.

Those initiatives underscore Treasury’s focus on the higher end of the wine market, which is known as “premiumization”, and comes as consumers are increasingly willing to pay for higher-quality wine.

“Today’s results confirm the positive momentum in our business which is being delivered through our premiumization strategy, the disciplined investments we have made in our business over recent years and importantly, exceptional execution by our global team,” said Treasury chief executive Michael Clarke.

During the recently concluded fiscal year, Treasury said earnings growth in its Americas unit was 13 per cent, in Asia it as 43 per cent, in Australia and New Zealand it was 15 per cent, and in Europe it was 4 per cent.

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