The New Zealand Wine Company

FFW Half Yearly Report December 2016

Mark Turnbull, Chief Executive Officer of Foley Family Wines Limited (FFW) announced today that the company’s unaudited half year result for the six months ended 31 December 2016 was a loss after tax of $323,000 compared with a profit of $1,632,000 for the same period last year. Underlying earnings of $204,000 was $1,968,000 lower than the same period last year. The Culverden Earthquake inflicted significant tank damage at the Grove Mill winery. Nearly all tanks sustained damage to some extent, from a complete write off to minor repairs. The company has recorded a one off cost of $989,000 which essentially reflects the insurance excess turning a first half profit after tax into a reported loss after tax of $323,000. The company is grateful of the support the company has received from its insurers, contractors and staff, as the winery will be repaired in time for the 2017 vintage. Sales Revenue from bottled wine for the 31 December 2016 half year was down $2,435,000 (14.8%) on the same period last year. Case sales were down 36,000 dozen from last year to 179,000 with the Australian and New Zealand markets accounting for 90% of this decrease. At the same time the New Zealand dollar has strengthened against all major trading currencies. The pound in particlar which has moved approximately 30% in the comparative period has had a material affect on the profitability of the UK market. Cash on hand of $3,883,000 reflects strong operating cashflow of $4,389,000 in the period. Further, the company has paid a dividend of $1,567,000 and reduced bank debt by $500,000 during the period. Mark Turnbull, CEO said “the last six months have been extremely challenging for the Company, besides the actual damage inflicted by the earthquake, getting the winery operational has been very distracting for our small team. The currency has compounded the problem of profitability of some markets and with a large vintage in 2016 many businesses are not in a position to increase pricing. We are determined to have a much stronger second six months and return the company to a growth path”. 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 Email: mark@ffw.co.nz