Image source: Pixabay

Highlights

  • In FY24 net profit after tax fell by 61.1% YoY to AUD 98.9 million, despite 12.9% revenue growth.
  • The luxury wine segment, especially brands like Penfolds and Treasury Americas, significantly contributed to the revenue growth.
  • In FY25, EBITS is forecasted to reach AUD 780-810 million, driven by luxury portfolio growth and Penfolds' double-digit growth.
  • TWE expects over AUD 20 million in synergies from the DAOU acquisition by FY26.

Treasury Wine Estates Limited (ASX:TWE) is an ASX-listed wine business, focuses on three principal activities – grape sourcing and growing, wine production and wine marketing, sales and distribution. The company manages a portfolio of international premium brands, addressing to needs of broad range of customers. The performance of the luxury portfolio, especially Penfolds and Treasury Americas resulted in new sales revenue growth of nearly 13% YoY in the financial year 2024 (FY24).

Highlights of FY24

In FY24, group revenue increased by 12.9% YoY to AUD 2,808.3 million, while net profit after tax dropped by 61.1% YoY to AUD 98.9 million. The period saw 1.4% YoY growth in EPS, representing the impact of the equity raise to partially fund the DAOU acquisition and earnings contribution from DAOU.

Performance of recent quarter

The luxury segment continued to support company’s performance in the first quarter of FY25 (1QFY25), as the company recorded double-digit organic group NSR growth during the period, over the previous corresponding period. The momentum of Penfold continued in 1QFY25, especially in Australia and Asia. In China, the performance aligned with company’s expectations, including during the mid-Autumn Festival period.

Luxury brand portfolio to drive future performance

After the realignment of the distributor arrangements in 1QFY25, the company expects to see boost in the performance of the Treasury Luxury portfolio in 2QFY25, especially during the key holiday selling period.

In FY25, EBITS is expected to fall in the range of AUD 780-810 million, backed by the continued momentum of its luxury brand portfolio driving top-line growth. Moreover, during the reported period, low double-digit EBITS growth is expected from Penfolds.

By the end of FY26, TWE expects to achieve synergies of more than AUD 20 million, as the integration of DAOU is progressing well.

The company intends to improve the operating performance of its premium brand portfolios and execution focus for transitioning to a single international premium division in FY26.

Share performance of TWE

TWE shares closed 0.61% higher at AUD 11.61 apiece on 21 October 2024. In the past one year, TWE’s share price has dropped by over 0.33%, while in a month, it has increased by 5.83%.

52-week high of TWE is AUD 13.01, recorded on 4 April 2024, and 52-week low is AUD 9.98, recorded on 10 January 2024.

TWE Daily Technical Chart, Source: EODHD/Others

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 21 October 2024. The reference data in this report has been partly sourced from EODHD/Others.