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Treasury Wine Estates Limited (ASX:TWE), based out of Melbourne, was established in 1843 and operates as a leading wine company in Australia, New Zealand, Asia, Europe, and the Americas. The brands include Chateau St Jean, Beaulieu Vineyard, Penfolds, Beringer, Lindemanâs, Wolf Blass, amongst many others.
The company has around 9,099 planted hectares of vineyards (owned and leased) in Australia and New Zealand; 3,894 planted hectares in many viticulture sites in California, including Napa Valley, Lake County, Sonoma County, and Central Coast, along with 148 hectares in Europe. It is involved in the viticulture, winemaking, marketing, sale, and distribution of wine through distributors, wholesalers, retails chains, independent retailers, on-premise outlets, and also directly to consumers. It also provides bottling services to third-party clients.Â
Treasury Wine recently announced its Interim Results for the half year ended December 31st, 2018 (1H FY2019) according to which the net profit after tax (NPAT) attributable to members of the company was recorded at $ 219.2 million, up from $ 187.2 million in the prior period corresponding period. The earnings per share were at 30.5 cents per share.
Besides, the net sales revenue rose to $ 1.507 billion from $ 1.295 billion in the prior period (an increase of 16.4% on a reported currency basis and 12.7% on a constant currency basis). The reportable segments, Americas and Asia contributed maximally to the total revenue with $ 604.6 million and $ 393.8 respectively, followed by Australia/New Zealand and Europe. The total revenue including other sources of income amounted to $ 1.537 billion.
The earnings before interest, tax, SGARA and material terms (EBITS) stood at $ 338.3 million, also up by 19.4% on a reported currency basis and up 17.8% on a constant currency basis, on the previous period. All regions delivered EBITS growth in 1H19.
As for the cost of doing business (gross profit less EBITS), the value rose to $ 306.0 million, depicting an increase of 16.6% on a reported currency basis. This was mainly due to investments in overheads relating to sales and other organisational capabilities across the Americas and Asia along with one-off cost associated with Simplify for Growth initiatives and the US route-to-market changes, taken above the line and not in material items. The SGARA loss for the period (Australian Accounting Standard AASB 141) was posted at $ 6.2 million.
The consolidated statement of cash flows depicts that there were cash inflows from operating activities at $ 93.1 million mainly resulting from large receipts from customers. The investing activities generated cash outflows stemming from payments for property, plant and equipment all amounting to $ 67 million. Due to high proceeds from borrowing, the financing activities also resulted in cash inflow at $ 65.8 million. The net cash and cash equivalents for the whole period were then recorded at $ 183 million.
With a massive market capitalisation of AUD 12.07 billion, the TWE stock has ~718.66 million outstanding shares on the ASX. With the close of the trading session on February 14th, the stock last traded at a market price of AUD 16.9, up 0.595%, indicating an intra-day gain of AUD 0.100. TWE has generated a positive YTD return of 14.44%.
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