The New Zealand Wine Company

Foley Family Wines Ltd - Half Yearly Report 31 December 2012

The merger of the Foley Family Wines Ltd (FFW) and New Zealand Wine Company (NZWC) was successfully completed on 4 September 2012. The results for the six months ended 31 December 2012 represents a full six months trading of FWW and results of NZWC since the merger completion date due to the reverse acquisition accounting requirements.
The FFW unaudited profit before interest of $1,193,000 represents a considerable turnaround compared with the 2011 result of the NZWC which had a loss before interest of ($1,044,000).
Revenue for the 31 December 2012 half year was $14,846,000 compared with $7,318,000 for the corresponding period for the NZWC.
The primary focus of the first 4 months of the merger was implementation of a new organizational structure, integration of finance function and inventory management.  The focus on inventory management is already paying considerable dividends. In the first 4 months long term debt was reduced by $1,700,000 and cash on hand at 31 December 2012 was $5,142,000. As a consequence of this, the $2,700,000 capital expenditure plan for the 2013 financial year will be completely funded from cash flow and no external financing will be required.
Like all exporters the exchange rate continues to erode margin and the company is concerned about the consequence for the industry as a whole with the enormous increase for the contract price for Sauvignon Blanc in 12 months. However, the board feels the company is extremely well placed going into the 2013 vintage.
Chairman, Bill Foley said that:
“I’m delighted with the progress that has been made in the first 4 months of the merger. My stated goal was for us to be a million case wine business in the future. I believe we now have the platform to achieve this.”
Authorised for public release.
For further information please contact:
Mark Turnbull
CEO, Foley Family Wines Limited
PO Box 67, Renwick, 7243, Marlborough
Tel: +64 21 714 885