Marlborough Wine Estates Group Limited Analysis

Overview

Marlborough Wine Estates Group Limited owns and operates vineyards in Awatere Valley, Marlborough. It is committed to producing high quality Marlborough Sauvignon Blanc and targeting the premium end of the white wine market. The company is developing growing recognition for its O:TU and Music Bay brands as quality New Zealand white wines, particularly in China.

Performance

The following information was extracted from Marlborough Wine Estates Group Limited's full year report, released on 29 August 2024:

Financial Performance

For the year ending 30 June 2024, MWE reported revenue of $8.35 million, marking a 11.4% decrease from the previous year. This decline was primarily driven by reduced bulk wine sales and slower international shipments, with external grape sales slightly lower than in the previous year.

As noted above, the smaller vintage yields had a significant impact on profitability, reflected in gross profit falling from $3.63 million to $0.64 million, as lower yields are recorded as higher costs of sales.

As a result, the Group posted a net loss of $3.29 million after tax, compared to a profit of $295,000 in FY23. A tax asset of $0.72m, has not been recorded, however will be available to offset against future profits. The Group also experienced a net cash outflow of $2 million from operating activities given the lower revenues, compared to an inflow of $619,000 in FY23.

As in prior years, the group commissioned an updated vineyard holdings valuation, which resulted in a decrease of $2.82 million being recorded in the financial statements, compared to an increase of $1.05 million in the previous year, and $13.09m in the past three years.