Despite the attack from a short-selling group during the year, Treasury Wine Estates has reported a solid rise in earnings and dividend for the year to June.
The short sellers had made claims about the way Treasury was booking sales, but that seems to have been pushed aside in the wake of the results release yesterday.
The company rode rising demand for luxury wine here and in key markets like China and the US which helped push net profit up by a hefty 16%, to $419.5 million for 2018-19.
That was on a 16.6% jump in sales to $2.83 billion. Costs rose slightly slower at 15.7%.
Treasury declared a final dividend of 20 cents per share, fully franked, to be paid on October 4, making a total for the year of 38 cents for the year, up a tasty 18.8%.
The shares rose up 2.6% to $17.46. That’s above where they were before the short-sellers attack in May, but still short of the August 1 high of $17.70.
“Today’s results confirm the positive momentum in our business which is being delivered through our premiumisation strategy, the disciplined investments we have made in our business over recent years and importantly, exceptional execution by our global team,” said CEO, Michael Clarke said in the statement.
The “strong underlying growth” was achieved even as “competitive and macro-economic” conditions were challenging in some of the company’s major growth markets, he added
Treasury reported EBITS (earnings before interest, tax and the agricultural accounting standard SGARA) up 25% to $662.7 million, in line with guidance it had issued.
The company said the strongest earnings growth occurred in the advancing Asian market, where EBITS rose a tasty 43% to $293.5 million, with a profit margin of 39.2%.
The Australia and New Zealand region saw EBITS grow 15% to $156.5 million, while the Americas division delivered EBITS growth of $218.7 million.
For the current financial year, the company said it was reiterating guidance for a profit rise of “approximately 15% to 20%” on an EBITS growth basis.
It said the improvement “will be delivered by growth in all markets, through continued top-line growth and premiumisation as well as ongoing operational efficiency.
“A patient and disciplined approach to execution through the improved US route-to-market model will be taken in seeking to achieve this target, and TWE will also seek to navigate adverse impacts to Commercial COGS (Cost of Goods Sold) from the 2019 Australian vintage.
