The embattled Australian Vintage Ltd (AVG) continues to ring in the changes during one of the most volatile years in the wine company’s history.
The company – which owns McGuigan, Tempus Two and Nepenthe among other brands – posted a $93 million loss for the last financial year because of heavy writedowns.
Revenue was up one percent to $261 million and the company remains positive about its future.
James Williamson, who only recently joined the Board – along with Margaret Zabel, Michael Byrne and Elaine Teh – has been appointed interim chair and CEO.
He replaces Peter Perrin who had been acting CEO since May, but has stood down for health reasons.
Perrin replaced Craig Garvin who was stood down for what the Board said was “engaging in conduct that displayed a lack of judgement”.
James Williamson is chief investment officer of Wentworth Williamson, which is a substantial shareholder of Australian Vintage.
He has more than 20 years of experience in financial markets including significant experience in covering alcoholic beverages as an analyst. Prior to Wentworth Williamson, he worked for Allan Gray Australia and prior to that, was portfolio manager of the Investec Australian Equity Fund.
Williamson told The Australian Financial Review that his number one priority was to find his successor.
“Within two months I would expect to have a new CEO,” he said.
It would be the fourth CEO for the company since May.
AVG derives two-thirds of its revenue from exports. It has grown the North American market by more than 28 percent over the previous year.
“China commenced re-ordering in the second half of the financial year while the partnership with COFCO has been renewed with a re-signing of the ten-year partnership agreement,” AVG says in a statement.
“The rest of Asia has been a challenging market for Australian exporters with inflationary pressures impacting discretionary spend.”
AVG says innovation is key to revenue and margin growth and see it as a core strength of the company.
“Premiumisation and innovation now represent 26 percent of revenue and 35 percent of margin, a significant increase from seven percent and 10 percent respectfully in FY19, prior to the launch of McGuigan Zero,” the company says.
Innovation launched in FY24 includes Not Guilty, McGuigan Mid, Tempus One and McGuigan Gold.
AVG is a global leader in no- and low-alcohol products with McGuigan Zero number one in the UK, Ireland, Australia and New Zealand.
The company has increased revenue from the no- and low-alcohol category by more than 20 percent on the previous year.
Part of AVG’s strategy is to invest in category leading, and margin accretive, brands and innovation.
In August the AVG Board approved a new strategy aimed at improving free cashflow and ROCE over the next three years.
The company says it will explore the potential for industry consolidation and collaboration opportunities “to continue to improve asset utilisation and earnings”.
In May AVG’s bank agreed to extend existing facilities to March 2027 with increased covenant flexibility.
The bank also agreed to provide an incremental $15 million of facilities, with $5 million to be paid back in November 2025 and the residual $10 million to be paid back in November 2026.
AVG also completed a $14 million capital raise.
The company has been working to increase the flexibility of its grape sourcing while removing assets that are not core to growth.
In July they sold the Yaldara vineyard in May and terminated the lease to the Balranald vineyard, which produced 11,000 to 13,000 tonnes of grapes per year.
Australian Vintage had agreed to merger talks with Accolade Wines before Accolade walked out, later buying the wine assets of Pernod Ricard including Jacob’s Creek.
On 28 August AVG shares were trading at 16 cents from a high of 44 cents in April.
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