The Treasury Wine Estates Ltd (ASX: TWE) share price is up over 2% after reporting, despite the market selloff.
Treasury Wines is a world-leader in wine making and brand marketing with some 13,000 hectares of vineyards available and around 3,400 employees across 70 countries. Some of more popular brands include Lindeman’s, Penfolds, Pepperjack, Rosemount, Yellowglen and Wolf Blass.
Treasury Wine’s Champagne FY19 Result
Treasury Wine Estates revealed that its net sales revenue (NSR) increased by 17% to $2.83 billion. In constant currency terms NSR grew by 12%, which was the strongest organic growth rate in the company’s history according to Treasury Wine Estates.
Treasury Wine Estate’s EBITS increased by 25% to $662.7 million (click here to learn what EBIT means, the S stands for SGARA (the change in value of its vineyard plants) and also excludes ‘material items’). The EBITS margin improved by 1.6% to 23.4%, a sign of its growing profitability.
Management said that premiumisation was a key driver of its performance, with NSR from the Luxury and Masstige segments growing 27% in FY19 and now represents 69% of the company’s revenue. Asia was a strong driver with its business model and had EBITS growth of 43%, although all regions reported NSR, NSR per case and EBITS growth along with volume growth.
The company said that, globally, shipments are broadly in line with depletions and forward days inventory cover are in line with the prior year.
Management also said that the US route-to-market changes have been successfully embedded with the focus now on leveraging the new operating model to improve profit margins in FY20 and beyond.
Treasury Wine Estates also today confirmed the acquisition of French production and vineyard assets in the Bordeaux region of France and announced the significant future expansion of its Luxury winemaking infrastructure in South Australia, which will support further premiumisation for the company.
Treasury Wine Management Comments
Treasury Wine Estates CEO Michael Clarke said: “The results announced today demonstrate the exceptional returns we are delivering for our shareholders, and they are a direct result of the investments and structural change our team has made in our global business over the past five years.”
Treasury Wine Dividend
The wine company’s Board decided to declare a final dividend of 20 cents per share, fully franked. This brings the total FY19 dividend to 38 cents per share, which is 19% higher than last year.
Is The Treasury Wine Share Price A Buy?
The Treasury Wine Estates share price is up around 2.5%, meaning it would be up even more on a normal trading day that didn’t have a significant market decline.
This result seems to have given investors confidence after the recent shorting. With continuing global growth I think Treasury Wine Estates is one to watch, although its share price is quite expensive at the moment. The growth shares in the free report below might be even better ideas.
After searching through a market with over 2,000 shares, our lead expert investment analyst has narrowed it down to just 2 of his favourite rapid-growth shares in a FREE report to Rask Media readers.
Over the past five years, these two shares have gone from being 'tiny caps' to being serious contenders for the ASX 200.
Idea #1 is taking on the world, starting with the huge USA market. In a just a few short years the company has snatched market share away from rivals and is on its way to being the market leader.
Idea #2 uses a 'printer and cartridge' type model to get large and established customers: a) using their healthcare industry-leading product, b) paying for it again and again and again... so it's little wonder this company is tipped to grow at a rapid pace in 2019.
Access the free report by clicking here now. Absolutely no credit card or payment details required.
Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.