Australian Vintage Limited (AVG), Australias largest listed dedicated wine company, has reported a $10 million first half profit, driven by higher export bottled sales and a reduction in costs.
The wine companys return to profitability is a welcome boost for the industry although AVG CEO, Dane Hudson, warned that trading condition remained tough.
Bottled export sales were significantly higher than last year, he said. Our earnings before interest and tax at $9.5 million were up from $5.7 million last year.
Our branded growth has been driven by a focus on making and marketing high quality wines at the right price point rather than chasing sales.
Hudson believes the Australian wine industry is undergoing structural transformation and that AVL is well positioned to meet short term and medium term challenges.
He said discussions with Constellation regarding a possible combining of part of their Australian and UK operations with AVG were continuing.
The market rewarded the result by driving AVGs share price up from 31 cents seven days ago to 37 cents yesterday (Feb 18), dipping to 35.5 cents at midday today.
AVG Price at posting:
33.4¢ Sentiment: LT Buy Disclosure: Held
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