Australian Vintage Ltd reports solid financial performance for the half-year ended 31 December 2023

Australian Vintage Ltd (ASX: $AVG) has reported its financial results for the half-year ended 31 December 2023. The company achieved revenue in line with the prior year at $136 million, with margin and underlying earnings showing improvement despite tough trading conditions. AVG continued to maintain and improve its market share across key geographies, with a focus on efficient brand investment, innovation, and cost reduction measures. The company's relentless efforts have resulted in an almost double increase in NPATS to $4 million compared to the prior year, demonstrating its resilience in an extremely challenging market.

Executive commentary on financial performance and future outlook

AVG's result for the half-year is in line with expectations, reflecting the company's ability to maintain revenue and improve earnings despite the challenging trading environment and industry conditions. The margin and underlying earnings improvement, as indicated at the Annual General Meeting, is a testament to our relentless focus on efficient brand investment, innovation, and cost reduction measures. We have invested $2 million in transformational costs, including consultancy fees, redundancies, and a full market review as announced last year. As cost reductions occur, we are confident in our future performance in this extremely challenging market. Our market share has been maintained and improved across key geographies, with encouraging signals that China will commence re-ordering in Q4 of the financial year, leading to expected improved earnings from Asia in H2. We are also pleased to announce that AVG has achieved B Corp certification, a significant independent validation of high Environmental, Social, and Governance (ESG) standards. The strategic review has identified real and achievable step-change opportunities, and we are confident in emerging from this period as a 'reset' business with a stronger platform for sustainable growth and shareholder value creation.

Summary of financial results and future outlook

Australian Vintage Ltd has delivered a solid financial performance for the half-year ended 31 December 2023, with revenue in line with the prior year at $136 million and an almost double increase in NPATS to $4 million compared to the prior year. The company's focus on efficient brand investment, innovation, and cost reduction measures has led to margin and underlying earnings improvement, demonstrating its resilience in an extremely challenging market. AVG has maintained and improved its market share across key geographies, with encouraging signals of re-ordering from China in the near future. The achievement of B Corp certification and the identification of real and achievable step-change opportunities through the strategic review further reinforce the company's commitment to high ESG standards and sustainable growth. Looking ahead, AVG anticipates improved earnings from Asia in H2 and a continued focus on net bank debt reductions, subject to a normal vintage, FX, and other agricultural risks. The company remains confident in its ability to navigate the challenging operating environment and create a more sustainable business for the future.