I liked the results. In fact, I would go as far to say as they...

I liked the results. In fact, I would go as far to say as they were good when you focus in on what matters.

1H22 results were pretty terrible. So if you annualise their performance in 2H22 which is essentially normalising the China issue, you would see that EPS growth was close to 10%. That's a pretty decent effort ex-China, and much better than what others were expecting. Penfolds continues to do well with their margin expansion; Americas is doing fantastic with Snoop Dogg rounding up his mates to all buy some premium wine. The only knock is perhaps that the volume came down a bit more than expected. But considering the margins are on the way up (21.1% with target of 25%), it's a very solid effort.

The cash flow and balance sheet looks really good. Very high conversion rate of EBITDA to the bottom line. And that has fundamentally supported the business to buy Franks and not really impact on the balance sheet. Very impressive that they are able to do that in such a short period.

I think today's valuations are not ridiculous. According to my calculations, looking at around PE=32x which does seem high, but EV/NTA=1.2x and EV/EBITS=19.1x both of which I would think are well below a takeover price. There's upside with earnings particularly by FY24, so reckon there could be room for that to catch up anyway.

Finally, really enjoy watching that PPE and non-current luxury inventory on the balance sheet at cost of production.