Ferret's Stock to Watch: MCGUIGAN SIMEON WINES LIMITED 07:31,...

Ferret's Stock to Watch: MCGUIGAN SIMEON WINES LIMITED
07:31, Monday, 30 August 2004

TOP WINE MAKER STILL SHOWING GOOD FORM IN CHALLENGING INDUSTRY

Sydney- Monday - August 30: (RWE)
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OVERVIEW:
********

One of McGuigan Simeon Wines strengths is the combination of
husband and wife, Brian and Fay McGuigan as a top Australian export
marketing team.

In 1992 Brian and Fay launched Brian McGuigan Wines from a zero
sales base to a point now, some 12 years later, sales are approaching 6
million cases with in excess of 50 per cent being sold into the
international market.

Year after year they successfully expand offshore exports.

They have the instinct to sell wine at prices buyers are looking
for.

McGuigan even blends wine for its competitors which seems to be
the difference in allowing the company to ride all kinds of industry
problems such a glut in grape production.

Managing director Brian McGuigan points out the company has a
large contract bulk wine operation.

"My guess is that we are the cheapest producer in the nation,"
and he warned that the company will continue to cut costs.

McGuigan Simeon is still following a strategy in offering
products at the higher end of the market.

On Friday McGuigan Simeon Wines Ltd announced a 25 per cent rise
in net profit to $40.25 million in the year to June 30.

Revenue rose 34 per cent to $394.02 million.

Earnings per share rose 15 per cent to 38.2c.

Final dividend has been increased from 11c to 13.75c, fully
franked, payable on November 22 for shareholders registered November 5.

SHARE PRICE MOVEMENTS
*********************

Shares of McGuigan Simeon Wines rose 3c to $5.22 on Friday, not
far from the rolling high for the year of $5.34. Low for the same period
was $4.40. Dividend is 23.5cents a share to yield 3,98 per cent.

Chairman David Clarke, commented at in the ASX preliminary
statement that, "This is a strong result in a challenging wine market.

"We have grown sales across the board as a result of focusing on
the move from bulk to higher-value branded products.

"McGuigan is now a major player in the wine industry," Clarke
pointed out, although failing to mention that McGuigan Simeon is now the
third largest wine producer in the country.

"In a fiercely competitive market and against a stronger dollar
we have used our increasing scale to lift earnings per share 15 per
cent, generate a 15 per cent return on capital and a 12 per cent return
on equity," chairman David Clarke disclosed.

"Our performance demonstrates the strength of McGuigan's income
streams and the diversity it allows us in production, supply, markets
and products.

"The integration of Miranda has been very successful.

"In fact we have lifted Miranda's own sales by relying on our
relationships as a preferred supplier," he said.

Sales of the group's Australian brands were up 86 per cent.

Branded export sales were up 24 per cent, with a 21 per cent
rise to the UK and Europe and a 56 per cent rise to North America.

"Our trading results for the first two months of the year are
above budget," Mr Clarke reeporte.

"The market will continue to be fiercely competitive and the
Australian dollar will remain strong.

"However, our low cost base, together with the growth of branded
bottled sales will see us deliver continued double-digit growth.

"While we have exciting growth potential in our existing
businesses we are always looking for opportunities created by the
current market conditions," the chairman concluded.

The good news is that in the opening weeks of the new financial
year, sales have been ahead of budget.

BACKGROUND:
***********

McGuigan Wines is the culmination of the McGuigan family's
involvement in the Australian wine industry for more than fifty-five
years.

The company's commitment to quality fruit and wine production has
seen McGuigans produce outstanding wines for both the domestic and
international wine consumers for prices that reflect excellent value for
money.

Brian McGuigan Wines was first listed on the Australian Stock
Exchange in March 1992 at 50c par a share but later changed its name
after the merger with Simeon Wines.

Before this event the McGuigan commitment to the wine industry
began through Perc McGuigan who was the Winery Manager with Penfolds
Wines during the 1940's, 50's and 1960's at the Dalwood property near
Branxton in the Hunter Valley.

In 1970 Perc's son Brian founded the Wyndham Estate brand located
at the old Penfolds Dalwood property.

The Wyndham Estate developed into a Public Company, floated in
1985, and comprised not only Wyndham Estate brand but also Richmond
Grove, Montrose, Craigmoor, Poets Corner, Saxonvale, Hunter Estate and
Amberton brand.

During the growth of Wyndham Estate Brian's wife, Fay, took on
the position as Export Manager in the 1980's.

The Wyndham Estate stable of premium wines proved immensely
popular in the International market and Fay's reputation as a wine
exporter of some note grew, as recent National awards and recognition
have shown.

Brian McGuigan Wines built up extensive vineyard holdings to
become a supplier of premium fruit to some of Australia's leading
wineries.

The Company has developed great strength in its vineyard base
with Brian leading the way in opening new vineyard properties both in
South Australia and New South Wales.

By the end of 2002, McGuigan Wines will have just over 10,000
acres of grapes under management and control after the merger with Simeon
Wines.

From the beginning in 1992 there has now been established
extensive entertainment and tasting facilities in Pokolbin including the
Hunter Valley Cheese Factory, as well as a National sales team to further
promote the McGuigan and Howcroft products in the Australian market.

The company now produces an extensive range of Sparkling, premium
Red and premium White varietal products with an emphasis on increasing
the premium Red section of their business significantly over the next
five years.

ENDS

Copyright © 2004 RWE Australian Business News. All rights reserved.

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Cheers,

Fig Jam

I don't hold MGW