Pernod Ricard's Millstream unit turns to loss on goodwill impairment
Pernod Ricard's New Zealand unit turned to a loss in 2017 after it booked a $150 million goodwill impairment.
The liquor group's Millstream Equities posted a $136.2 million loss in the year to June 30, 2017, from a $7.4 million profit a year earlier. Revenue rose to $248 million from $241 million a year earlier, while cost of sales increased to $178 million from $160 million the prior year.
Millstream Equities owns a number of New Zealand wine brands including Church Road, Brancott Estate and Stoneleigh. Its French-listed parent, Pernod Ricard SA, last traded at 131.20 euros, up 26 percent in the last 12 months.
The impairment left the group calculating goodwill at $157.7 million, compared to $307.7 million in 2016. Notes to the accounts said the goodwill balance relates to the historical acquisitions of Montana Group by Millstream Equities in 2001.
Operating expenses increased tenfold to $196 million, including the large goodwill impairment. Within that category, the company also spent $16.5 million on earthquake business continuity and repairs, up from $4.9 million a year earlier.