Marlborough Wine Estates Announces FY23 Results

For the year ended 30 June 2023 (FY23)

Highlights:
• Increase in sales revenue, gross profit, and cashflows.
• Further year of profitability driven by continued focus on premium branded wine strategy and global distribution.
• Continued premiumisation focus delivering 69% increase in international sales of premium branded wine.
• Strong financial structure in place to support future growth, with expansion of global distribution network remaining a key priority.

Award winning New Zealand wine company, Marlborough Wine Estates Group Limited (NZX: MWE), has reported its unaudited preliminary results for the year ending 30 June 2023 (FY23), with a further year of profitability and positive strategic progress.

The group’s strategy is to focus on the growth of premium branded wine sales in all markets. During FY23, MWE’s sales volumes of branded wine internationally grew by 69% while domestic sales grew by 10%. Growth has been driven by sales of MWE’s premium OTU brand in the UK, USA, Canada, China and New Zealand.

CEO of Marlborough Wine Estate, Andrew Stafford, said: “We are very pleased to report another profitable year for Marlborough Wines Estates. We have continued to focus on our strategy of growing branded wine revenue across our global distribution network. Our premium OTU wine brand is central to this success and continues to gain recognition for its high quality and distinctive wine style with consumers and the wine trade.

“Our business made significant progress over the past year, despite economic challenges including the inflationary environment which has seen input costs steadily rise across the business. These economic conditions are not unique to New Zealand and the wine industry globally continues to be impacted by the macro-economic environment. Marlborough Wine Estates is well positioned for the year ahead with a strong financial platform, robust inventory levels and a clear focus on our strategic pathways. We remain positive about our future.”

MARKET CONDITIONS

New Zealand wine continues to be sought after globally and, in the year ended June 2023, total wine exports reached $2.4 billion, an increase of 23% on the previous year. The long-term demand and supply balance remains favourable and this is being reflected in the strong demand for vineyard properties in Marlborough. The wine industry has also proved to be resilient during difficult economic conditions. Consumers globally view premium wine as an affordable luxury which remains important to their lifestyle despite reductions in disposable incomes.

FINANCIAL PERFORMANCE

Sales revenue for the year ended 30 June 2023 grew strongly to $9.43m, up 18% on prior year. This was driven by a 27% increase in branded wine revenue to $5.73m which reflects the group’s ongoing focus on premiumisation.

Gross profit increased by 24% from $2.91m to $3.63m and cashflow from operating activities improved by $1.24m.

Net profit after tax of $295,193 (FY22: $328,012) was in line with guidance and reflects the ongoing cost pressures across all parts of the business.

VINTAGE SUMMARY

The 2022 vintage signalled a return to expected yields in Marlborough following a very low yielding vintage in 2021. This enabled the group to continue to grow branded wine sales revenue during the year and expand global distribution across domestic and international markets.

MWE’s 2023 vintage increased 1.7% on the 2022 vintage and in-line with pre-vintage expectations. The group is well positioned with inventory of high quality wine to meet customer demand in FY24.

The group continues to invest in productivity initiatives in the vineyards including improved viticultural practices, new equipment and vines. These investments will enable MWE to deliver long term sustainable productivity improvements to meet future demand.

OUTLOOK

MWE is focused on building on the platform that has been created in recent years. The OTU brand has generated strong consumer appeal in a short period of time. Expansion of the global distribution network remains a key priority and represents a significant growth opportunity for the business. The group has a strong financial structure to support future growth and maintains a low debt position.

Growth priorities in FY24 remain focused on:

• Growth of premium branded wine
• Expansion of market share
• Expansion of MWE’s international distributor network
• Identify opportunities to enhance growth through acquisition

Chairman of Marlborough Wine Estate, Min Jia, said: “We have the people, partners and business foundation to be successful in a globally challenging business environment. The Board would like to thank our team, suppliers, business partners and shareholders for their continued support over the last year. We look forward to delivering further success in FY24.”

Please see attached the results announcement and the unaudited financial statements.


ENDS


Authority for this announcement

Name of senior manager or director authorised to make this announcement: Andrew Stafford
Contact phone number: 09 215 6650 Contact
email address: [email protected]
Date of release: 29 August 2023


For media assistance and enquiries, please contact: Jackie Ellis on 027 246 2505 or email [email protected].

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Announcement PDF