Australian Vintage cuts forecast amid wine glut
Australian Vintage has revised its financial forecast, projecting a $AU13 million cash outflow instead of breaking even as previously expected. The update reflects ongoing challenges in the wine industry, including global oversupply and faltering demand.
Australian Vintage, the country’s third largest wine group, has lowered its projections for this financial year, telling shareholders that it expects an $AU13 million cash outflow rather than breaking even, as previously forecast.
This is due to the continuing oversupply of wine affecting all producers combined with mediocre sales.
Debt grows despite year-on-year improvement
While the latest projection is an $AU15 million year-on-year improvement, it will take the year-end net debt to $AU76 million, while the company is presently valued on the Sydney stock market at $AU23.6 million.
Australian Vintage says that it is “disappointing” and that it will be forced to take even more stringent measures to ensure sales growth at the same time as managing its stocks in the forthcoming financial year.
Falling sales for key brands
It expects sales in the present full year to fall by 3%, with its flagship McGuigan and Tempus Two brands likely to reflect the soft market.
After releasing the update to shareholders, the shares fell by up to 12% from their already heavily depressed level to just $AU0.75, further stoking speculation that Vinarchy (formerly Accolade) will seek to takeover AV.
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Takeover speculation grows
The rumoured plan is that Vinarchy would use AV’s share listing as a cheap method of eventually generating a profitable exit for the international financiers who now own it.
Neither company has commented on the press speculation about a link.
New product launch offers glimmer of hope
In its update, AVG also said it had spent significant time and capital on the launch of its 187ml Poco Vino bottle, which will hit the shelves in Britain in July.
It said pre-sales have “already exceeded our expectations”, so the group has brought forward further investment in packaging as it continues to build inventory.
Looking to FY26 for recovery
AV is optimistic that FY26 will see mid-single-digit sales growth and that fiscal 2026 will be a “transformational year for the group, both in terms of turning declining sales into growth and generating free cash flow.”
Strategic acquisition targets UK market
The update to shareholders came as the group announced it would acquire MadFish Wines for an undisclosed amount.
MadFish represents a small portion of Australian Vintage’s overall portfolio, but it is significant to the UK market, selling around 200,000 cases.
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