Treasury sells 12 US wine brands

Treasury Wine Estates has offloaded 12 “non-core” brands while lifting profit guidance in line with market expectations.

Treasury Wine Estates CEO Michael Clarke.

Australian wine giant Treasury Wine Estates has offloaded 12 brands in the US while lifting its profit guidance in line with market expectations.

The sale of the non-core portfolio covers around a million cases of commercial wine and comes as the group continues to simplify its operations.

Treasury (TWE) said the divestments would not have an impact on total earnings, but would help drive a lift in profit margins.

An official sale price was not outlined, although the group said it fell broadly in line with book value.

The ASX-listed heavyweight also confirmed its pre-tax 2016 financial year earnings would meet market expectations of $330-$340 million.

The last time the group discussed profit it had tipped a result at the upper end of its guidance range of $270-$290m, but analysts were more optimistic in their outlooks.

Treasury looked to downplay the impact of the Brexit vote on its operations, saying its European sales contributed less than 10 per cent of profit, with active hedging strategies minimising the currency impact.

“After adjusting for updated foreign currency movements, TWE does not expect any material change to its FY17 earnings expectations,” the group said.

Its full year 2016 results will be released on August 18.

At 2.30pm (AEST), Treasury shares jumped 2.4 per cent, against a broader market fall of 0.3 per cent.