Treasury Wine Estates’ ambitious vision to be the world’s most desirable luxury wine company has been highlighted by a 13 per cent jump in full-year earnings, driven by its flagship Penfolds brand and Treasury Americas arm.
Already Australia’s biggest wine producer, Treasury Wine on Thursday reported earnings before interest and tax lifted 12.8 per cent to $658.1 million.
That was driven by strong luxury portfolio growth in Penfolds and Treasury Americas, as well as contributions from the recently acquired Californian wine operation DAOU Vineyards.
DAOU delivered second-half earnings of $US24.7m, in line with guidance, with business integration underway and on track to deliver synergies of $US20m-plus by the end of the 2026 financial year.
“Our fiscal 2024 performance reflects the excellent momentum we continue to build behind our luxury brand portfolios in Penfolds and Treasury Americas,” Treasury chief executive Tim Ford said.
“These two outstanding luxury wine platforms have very clear strategic direction and execution priorities, and we have great confidence in both as strong drivers of long-term growth for Treasury Wine Estates.”
But Treasury Wine’s net profit slumped 61 per cent to $98.9m for the year to the end of June, due to non-cash impairment charges linked to the divestment of its lower-end labels Wolf Blass, Yellowglen, Lindeman’s and Blossom Hill announced earlier this month.
These commercial brands represented less than 5 per cent of Treasury Wine’s gross profit.
Along with its full-year results, Treasury Wine also announced it would create a Global Premium division by July 1, 2025 through the combination of its Treasury Premium Brands and Treasury Americas premium brands.
The new division would comprise of brands including the Snoop Dogg-backed 19 Crimes, Squealing Pig, Matua and Pepperjack.
Earnings at the high-end Penfolds lifted 15.5 per cent to $421.3m, while sales grew 22.1 per cent to $1 billion amid the re-establishment of the brand in China after the Chinese government lifted onerous tarrifs in April.
Treasury Americas earnings grew 13.1 per cent $230.5m.
Treasury Premium Brands reported a 7 per cent decline in earnings to $76m.
“In relation to our Premium brands, we are focused on improving the performance of this global portfolio to deliver greater value to TWE overall, with implementing key changes to enable the evolution to the new Global Premium division a key focus through F25,” Mr Ford said.
The wine producer expects earnings for the 2025 financial year to be between $780m and $810m , but Ord Minnett noted this guidance appeared soft driven by Treasury Premium Brands.
It declared a final dividend of 19¢ a share, up from 17¢.