Treasury Wine Shareholders Toast Higher Dividend

Australia’s biggest wine group, Treasury Wine Estates (TWE) is rewarding shareholders with a 20% higher dividend after revealing a 17% rise in interim net profit yesterday.

The company also told the ASX that it will resume its dividend reinvestment plan in time for the higher interim.

On a statutory basis, TWE said its net profit after tax rose 17% to $219.2 million for the six months to December, thanks to earnings growth across all of its operating regions.

The interim dividend was lifted by 20% to 18 cents a share, fully franked dividend. The shares were up 0.6% at $16.90 at the close yesterday.

Treasury said it would reinstate its dividend reinvestment plan, which would be available to Australian resident shareholders in time for the upcoming interim dividend.

“I am very proud to see the foundation established in the previous years continuing to deliver sustainable growth, as shown by yet another strong set of financial results for the group,” said CEO Michael Clarke said in a statement with the results.

“Like in previous years, we’ve delivered on expectations while continuing to implement significant changes to the business and investing for future growth.

“The results presented today demonstrate not only the strength of our premiumisation strategy and global balance but in particular they highlight the strength of our competitively advantaged regional business models,” he said.

Treasury said the growth in its net sales revenue for the December half, up 13% on a constant currency basis to $1.51 billion, was “the strongest organic growth rate in company history”.

Earnings before interest, tax, the accounting treatment SGARA and material items (EBITS) rose 19% to $338.3 million.

The company said its performance in Asia was one of the highlights of its result, with EBITS up 31% to $153.1 million and an EBITS margin of 38.9% and was the star part of the group’s performance in the six months.

Underlying earnings in the Americas rose a slower 12% to $112.1 million after Treasury decided it would change how it distributed its wines in the US on a state-by-state basis, with a focus on what delivered the best performance.

Treasury says it will now aim to grow its share of China’s imported wine market by focusing on French wine – which accounts for 30% to 40% of the country’s already huge market – under its Maison de Grand Esprit label.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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