Thursday 11th February 2021
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Marlborough Wine Estates Group Limited is pleased to release its financial results for the six months ended 31 December 2020 (HY21). During the period, sales revenue increased 19% compared to HY20 while the net loss after tax decreased by 26.2% from the previous half year.
MWE continued to grow its bottled wine sales revenue in the New Zealand market during HY21. The Company also shipped its first significant orders in Canada, Malaysia, and Singapore and continued to receive consistent orders from Taiwan, Japan and Finland despite COVID-19. In the New Zealand market, MWE expanded its market share significantly in the South Island and continued to grow its revenue in the North Island market.
Due to the accounting treatment of the market value of grapes, profit from the vineyard was recognised in the second half of the previous financial year but resulted in a higher cost of goods sold for the current financial year.
The gross profit MWE generated in the HY21 is mostly unchanged compared to the HY20.
The growth in sales and marketing led to an increase in operating in HY20. The increase in operating expense was driven by the additional, one-off market investment required to launch our range in Foodstuffs South Island.
The launch has been a success in terms of revenue growth achieved and the Company will be focusing on optimising this investment and costs in the second half of FY21 to gradually bring marketing investment towards a sustainable level.
Other areas of increased expense in HY21 included the legal fees to settle and close out the long running dispute between the Ministry of Primary Industries (MPI) and MWE’s former contracted wine processor and the insurance company, an increase in audit costs from the previous financial year and a change in accounting policy (revaluation model). MWE considers these to be all one-off, non-recurring costs. The Group also received settlement from its insurer for the MPI case of $240,000 after deducting legal costs.
MWE has maintained strong growth momentum in its bottled wine sales and will continue to allocate more of its grape production to bottled wine sales.
As announced in October last year, MWE appointed a new independent director, Christine Pears, who has more than 20 years leadership experience in the wine industry. In early December, MWE also started working with a new winemaker, Jeff Clarke, who has produced many trophy and gold medal winning wines. MWE believes these changes position MWE for future growth, as improved wine quality, corporate strategy and governance are key for the next stage of the Company’s growth initiatives.
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