Shares in Australian Vintage (AVG), the owner of McGuigan wines and a string of other brands, fell 5% to 38 cents yesterday after the company revealed a disappointing update on the 2015 vintage and its impact on the company’s finances.
Australian Vintage told the ASX that as a result of weaker than expected harvest and crushing of its own grapes, it expects owner full year profit to drop about 1%.
The company says grape yields from its vineyards have been disappointing.
‘Yields from owned vineyards are below expectations due to the effects of the previous year’s frost on our own vineyards,’ Australian Vintage said in yesterday’s statement.
The winemaker said it also processed fewer tonnes of grapes for other customers.
The amount of grapes crushed for the 2015 vintage dropped by more than 10,000 tonnes.
Australian Vintage crushed 113,771 tonnes of grapes from the 2015 vintage compared to 124,215 tonnes last year.
AVG vs TWE 2Y – Low yield vintage at McGuigan
Australian Vintages’ brands include McGuigan, Tempus Two, Nepenthe, Miranda and Passion Pop.
It grows and sources grapes from the Hunter Valley in NSW, the Sunraysia and Riverland regions of NSW and South Australia, and from the Barossa Valley, Adelaide Hills, Coonawarra, Eden and Clare Valleys, McLaren Vale and Padthaway regions of South Australia.
AVG says it now expects 2014-15 net profit to be 10% below the $10.5 million it made in the 2013-14 year.
Australian Vintage said its total sales to the end of April 2015 were up 6% on last year due to improved sales in Australasia, North America, the UK and Europe.
Packaged sales, which include branded bottles and casks, in Australasia and North America were up 10 % and sales in the UK and Europe were up 11%.