The New Zealand Wine Company

The NZ Wine Co Ltd - 2012 Operating Results

The New Zealand Wine Company Limited (NZWC) Directors and Management have spent the past year working to restructure the business while also working with Grant Samuel to implement a capital restructuring plan that would reduce ANZ Bank debt by $5 million. NZWC shareholders voted 99.9% in favour of a merger of NZWC with Foley Family Wines New Zealand Limited (FFWNZ) at a Special Shareholders Meeting in Blenheim on 14 August 2012 and the Overseas Investment Office gave their consent to FFWNZ to merge with NZWC on 15 August 2012.
 
NZWC audited ‘NZ IFRS’ net earnings for the 30 June 2012 full year resulted in a net loss after tax of ($5,330,000) which represents a significant increase on the ($3,177,000) net loss reported for the same period in 2011. A number of significant NZ IFRS non cash revaluation adjustments at balance date contributed to the increased 2012 year loss.
 
NZWC’s audited ‘underlying’ operating loss of ($2,519,000) in 2012 before impairments, NZ IFRS revaluation adjustments and income tax is an increase over the comparative ($1,852,000) in 2011.  The restructuring of the Company significantly improved operating earnings in 2012 but the gains made during the year were more than offset by significant additional impairment, interest cost increases, plus one off Bank review costs, restructuring costs and merger related expenses totaling $1,524,000.
 
NZWC total revenue for the 2012 full year was $13,517,000, a 21% increase on the $11,158,000 in 2011 andnet cash flow from operating activities was strongly positive at $1,549,000 for the full year, as a result of increased wine sales and a reduction in inventory.
 
Total shareholders’ equity as at 30 June 2012 was $9,491,000 a reduction of $5,498,000 compared to the equivalent $14,989,000 reported for the same period in 2011, with net tangible asset backing at year end 2012 being $1.09 per share.
 
Chairman, Alton Jamieson said that:
 
“The decision NZWC shareholders made to approve a merger with Foley Family wines New Zealand wine business provides a much stronger balance sheet with a more conservative debt to equity ratio and the restructuring of NZWC in the past year has positioned the Company well to be able to manage the merger effectively while also positioning NZWC to grow profitably in the future.”
 
“In the June 2013 year the merged company will sell its wines into the distribution channels that are expected to maximise net margins and when coupled with the cost savings from merging the marketing and back office functions of NZWC and FFWNZ, the sum of the net returns from the two businesses are expected to be stronger than the stand alone businesses.”
“Directors are unable to provide a reliable forecast for the 2013 year at this point due to the current uncertainties facing the New Zealand wine industry, particularly around the flow-on impacts to the 2013 harvest from the poor flowering that caused a lower than expected 2012 harvest. An update will be provided to shareholders at the NZWC AGM on 15 November 2012.”
“We are all looking forward to getting on with integrating the operations and working to achieve our objectives for the enlarged NZWC business.”
 
A full copy of the Annual Report for the twelve months ended 30 June 2012 including the Directors’ Report, comparative financial statements and explanatory notes is available on the NZWC web site, at: http://www.nzwineco.co.nz/financial.aspx.
 
Authorised for public release.
 
For further information please contact:
 
Alton Jamieson
Chairman
The New Zealand Wine Company Limited
PO Box 67, Renwick, Marlborough
Telephone number: 021 964 995
E Mail address: alton_jamieson@xtra.co.nz  
Web site address: www.nzwineco.co.nz