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MGW posts a creditable result in challenging times
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McGuigan Simeon Wines Limited (MGW) released its financial results for the full year ended 30 June 2005, posting a decrease of 11% on net profit after tax.
In domestic sales, bottled sales of $98.0 million were up 15%, reflecting continued focus on branded products, scale and mature distribution. Bulk sales increased 4% to $69.7 million with volume actually increasing by 13%. Average sales in dollars per litre declined due to the tight domestic market conditions.
In export sales, total export sales, bottled and bulk, increased 34% in dollar terms with significant increases in the UK/Europe and the US. Actual sales volume increased by 40%.
Exports of bulk wine (including bulk in bottles) increased by 49% to $116.3 million based on a strengthening distribution alliance with customers, particularly in the UK and the rest of Europe.
Export of branded bottled sales increased by 8% with a significant increase achieved in the UK. Sales to the US struggled due to the financial difficulties experienced by MGW’s agent. The company has now appointed a new agent in the US and sales should improve in the 2005–06 financial year.
The contribution from owned/leased vineyards decreased by $9.7 million to $4.7 million due to the significant decline in the market price of grapes from MGW’s owned/leased vineyards and the full-year impact of vineyard leasing costs.