Foley Family Wines [NZAX: FFW], which operates brands including Vavasour and Martinborough Vineyard has more than quadrupled full-year profit to $6.5 million after a bumper harvest.
The NZAX-listed company controlled by American billionaire Bill Foley lifted sales to the UK and Europe by 48% to 71,000 cases. Sales in New Zealand fell by 14% to 101,000 cases, a performance it described as "disappointing." Sales in Australia were flat, while North American sales rose 15% to 131,000 cases.
The average price per case also fell 2.5% to $78 from $80.
The increase in profit, to $6.5 million from $1.2 million, is largely due to an unrealised gain in the value of harvested grapes, reflecting the greater output in 2016 compared to the 2015 harvest.
The 2016 vintage saw a yield of 6,954 tonnes of grapes, up 31% on the 2015 harvest of 5,300 tonnes. Vineyards owned by Foley in Martinborough saw yields more than double, while yields in Marlborough rose by 42%.
Chief executive Mark Turnbull said this was already having an impact on the market. "We are already seeing a large volume of bulk wine listed at low prices."
The smaller 2015 vintage meant Foley sold just 14,542 cases of bulk wine, down from 91,577 the previous year. While total revenue for the business fell to $34.8 million from $37.1 million a year earlier, sales of its bottled rather than bulk wine, rose to $32.9 million from $31.5 million.
Despite the increase in sales to the UK and the EU, the decision of the British people to vote to leave the European Union "adversely affected the final result due to the unrealised losses on the revaluation of financial assets at year-end," the directors told investors.
A dividend of 3c per share is to be paid, an increase of 50% from a year earlier.
Shares in Foley Family Wines were unchanged at $1.65 and have risen by 19.4% in the past 12 months.
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