The New Zealand Wine Company

Solid Performance for First Full Year

Foley Family Wines Limited (FFW) announces a Profit for the period after income tax of $4,344,000 on revenue of $30,954,000 for the Group for the year ended 30 June 2014.  This is the first full year result since the reverse acquisition of The New Zealand Wine Company Limited (NWC) by FFW on 4 September 2012. FFW has booked a $986,000 gain on purchase of Martinborough Vineyard Estates, based on the assets being valued at fair value.
Chief Executive Officer of FFW, Mr Mark Turnbull, said “The Directors believe this is a solid performance in light of the transformation the company is going through.”
“While our revenue remained flat for the year, the focus has been on fundamental profit improvement. This has been demonstrated by an increase in underlying earnings to $1,201,000 from a loss last year of $508,000. Last year we outlined an expectation that the business would struggle to achieve a satisfactory margin until the 2012 vintage was sold through and we had moved on to the 2013 vintage. This was demonstrated by a $4 per case increase in margin for commercial brands in key markets for the 2013 vintage.  FFW has also continued a strategy of prudent overhead management, which has resulted in a reduction in operating costs of $246,000.”
Export case sales were up 34,000 to 274,000 for the financial year ended June 2014, with the majority of this growth coming from the USA. Domestic sales were flat at 102,000.  However, in real terms this reflected growth as a significant proportion of the 2013 domestic sales included distressed inventory sales at a negative margin. Bulk wine sales were equivalent to 55,000 cases, down 33,000 cases from 2013. In reviewing these numbers we must bear in mind that there has been adverse exchange rate movement for many of the major markets over the last 12 months and the bulk wine price of Marlborough sauvignon blanc has fallen over $1.50 per litre. The pleasing aspect has been the increase in branded wine sales and the growth of the Dashwood brand.”
The Directors remain cautiously optimistic about the next year’s performance. FFW will benefit from full year’s sales with lower cost of goods, as well as routes to market that are constantly being found and refined. The Directors are mindful of the continued high NZD exchange rates for most of the major markets along with the increase in supply as a consequence of the large 2014 vintage.
The Directors have resolved that no final dividend will be paid for the year ended 30 June 2014. The policy of the Board is to evaluate present and projected cash flows, sustainable underlying earnings and, if prudent, declare an annual dividend subject to current and future capital and acquisition expenditure requirements.
The Annual General Meeting of FFW will be held in Wellington on Thursday 20 November 2014.
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