Business

Australian winemaker TWE returns to profit

penfolds pics Image copyright Getty Images
Image caption Treasury Wine Estate is the firm behind one of Australia's most recognised wines, Penfolds

One of the world's biggest publicly-listed winemakers, Australia's Treasury Wine Estates (TWE) has returned to profit in the six months to December, citing solid sales among other factors.

The Melbourne-based firm, famous for Penfolds, posted a net profit of 42.6m Australian dollars ($33.21m; £21.5m).

The half-year results mark a turnaround from the A$100.9m loss it posted for the 12 months to June 2014.

Sydney-listed shares in the firm rose 0.92% on the news.

James Lennon, a Sydney-based analyst with Fat Prophets told the BBC the results were "a good one and in line with what the market was expecting".

He said the recent changes the firm had made to its operations in Asia and to its overall business had been good, and welcomed the 8.7% jump in sales.

TWE said it had changed its business in north Asia to become more retail customer focused.

"We are at the start of our transition from being an order-taking, agricultural company to a brand-led marketing organisation," said TWE chief executive Michael Clarke.

Image copyright Getty Images
Image caption TWE is behind some 80 brands, including wines from Australia, California, New Zealand and Italy

"TWE is starting to address fixing the core of the business and is being set up for sustainable, future success."

The firm also said recent declines in the Australian dollar against the US dollar were "providing a positive backdrop for the Australian wine industry".

Takeover bid

In September, TWE's shares fell some 13% after it rejected two separate multi-billion dollar takeover offers.

But Mr Lennon said the firm could still be a takeover target.

"With the Australian dollar having fallen to its levels today, I suspect the current rumours that KKR is still looking at the firm have some merit," he said.

The winemaker said at the time that the two offers - both worth A$5.20 (£2.80) a share or A$3.4bn (£1.88bn) - had "undervalued the company".

One of the bids was from US private equity giant KKR and partner Rhone Capital, with the second from an unidentified firm.

TWE started trading on the Australian Securities Exchange (ASX) in 2011.

Penfolds was named Australian Wine Producer of the Year by the International Wine and Spirit Competition in November last year.

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