How is Australian beverage industry faring? Here are stocks to watch out for - Kalkine Media

January 12, 2023 07:20 PM AEDT | By Khushboo Joshi
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Highlights

  • Food and beverage is a crucial sector of Australian economy.
  • As per the Australian Beverages Council Limited (ABCL), the non-alcoholic beverage industry contributes over AU$7 billion annually to the economy.
  • Known for its wines, Australia produces over 1 billion litres of wine annually.

The food and beverage industry is one of the most crucial sectors of the Australian economy. Not only does it contribute financially, but also provides ample employment opportunities. The beverage processing industry is the country's biggest manufacturing industry with diverse-sized industry players. The list features multinationals producing large-volume beverages to smaller firms that strive to meet the niche asks.

As per the Australian Beverages Council Ltd (ABCL), the government body representing the non-alcoholic beverage industry, contributes more than AU$7 billion to the economy each year. As per Wine Australia, there are more than 2000 wine businesses across Australia, producing over 1 billion litres of wine on an annual basis. As per this organisation, Australian companies produced more than 1.3 billion litres of wine in 2021-2022. The sales stood at AU$5.28 billion.

Against the backdrop of the same, let us skim through some beverage-focused companies listed on the ASX. Featured here are Treasury Wine Estates Limited (ASX:TWE), United Malt Group Limited (ASX:UMG), Lark Distilling Co. Ltd (ASX:LRK) and Good Drinks Australia Ltd (ASX:GDA).

Treasury Wine Estates Limited (ASX:TWE)

Headquartered in Melbourne, Treasury Wine Estates is an Australian global winemaking and distribution business with a market capitalisation of AU$9.73 billion.

During its Annual General Meeting in October 2022, CEO Tim Ford shared that while the net sales revenue declined 4% to AU$2.5 billion, reported EBITS rose 3% to AU$524 million. The full-year dividend paid in FY22 was 31 cents per share, up 10.7% on the fiscal 2021 dividend. He also shared that the company witnessed robust growth across key Premium and Luxury brands like 19 Crimes, Pepperjack, Squealing Pig and Wynns.

Recently, Treasury Wine announced that John Mullen will join the firm's board as a non-executive director.

Looking at the recent share price performance, Treasury Wine Estates is up 0.15% in the previous month. In the last six months of trading, the stock has gained 19.51%, and in the previous year of trading, the company has gone up 14.57%. On a year-to-date basis, TWE has gained 3.98%. During the last five years of trade, TWE has shed 12.31% (as of 12 January 2023).

United Malt Group Limited (ASX:UMG)

This beverage company has a market capitalisation of AU$1.03 billion. Headquartered in New South Wales, the company produces around 760kt metric tonnes of malt in North America, 225kt in the UK and makes 250kt of malt in Australia.

In its FY22 results release shared in November 2022, United Malt notified that group revenue has risen by 13.9% to AU$1,406.7 million, while the underlying EBITDA was AU$105.9 million, down 23.2%. Statutory net profit after tax was AU$11.6 million, and statutory earnings per share was 3.9 cents. The company's net debt was AU$453.4 million (as of 30 September 2022).

Meanwhile, the company's shares have increased by 6.34% during the previous month on the ASX. In the last six months, shares have risen by 1.44% and have tumbled 19.08% in the last one year. In the last five years, the company has shed 14.15% (as of 12 January 2023).

Image: © Mist | Megapixl.com

Lark Distilling Co. Ltd (ASX:LRK)

Claiming to be Australia's first carbon-neutral distillery, Lark Distilling holds a market capitalisation of AU$173.37 million.

On 10 January 2023, Lark Distilling notified that its chief financial officer, Alex Aleksic has resigned from the company and financial controller Michael Andrews has been appointed as interim chief financial officer.

In its Annual General Meeting held in November 2022, the company shared that it had achieved 2.1 million litres whiskey under maturation as of 30 June 2022. During FY22, Lark produced around 430,000 litres at 43% ABV across its three distilleries.

In FY22, the company recorded net sales of AU$20.3 million, up 57% year-on-year.

Good Drinks Australia Ltd (ASX:GDA)

One of Australia's biggest independent brewers, Good Drinks has a market capitalisation of AU$88.55 million.

On 9 January 2023, Good Drinks shared that it has partnered with Australia's number-one-ranked professional surfer Jack Robinson. Jack will be a global brand ambassador for GDA's flagship brand Gage Roads and has been issued performance rights in GDA which will vest into shares soon.

In its Q1 FY23 sales update released in November 2022, Good Drinks shared that the first quarter delivered a revenue growth of a whopping 157%. GDA also stated that it has secured adjoining land to the manufacturing site in Palmyra, enabling capacity expansion to 30 million litres per annum from 20 million litres currently. As per GDA, it will likely produce 16 million litres in FY23.

Meanwhile, shares of the company have gained 0.74% on the ASX in the previous month of trading. In the last six months, shares have increased 2.24% However, in the last one year, the shares dropped 22.16%. During the last five years, they have lost 23.89% (as of 12 January 2023).


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