Vintage Wine Estates Reports Significant Losses

The US corporation observes declining revenues amidst rising costs. Depreciation makes for deep red figures.

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Company Logo of Vintage Wine Estates
Company Logo of Vintage Wine Estates

Vintage Wine Estates (VWE), the 14th largest wine producer in the USA, has unveiled its financial figures for the last quarter and the entire fiscal year 2023 (July 1, 2022 – June 30, 2023). The corporation generated revenues of $283m, marking a decrease of approximately $9.6m from the prior year (-3.3%).

This downturn in sales is attributed to the discontinuation of a marginally profitable spirits line and a drop in revenues from "bulk" spirits, amounting to $4.2m. On the flip side, new acquisitions yielded about $21m, with ACE-Cider alone accounting for $8.3m. Gross profit dwindled by about $3.7m to roughly $85.2m.

However, impairments in company values and intangible assets, combined with losses on asset sales, led to a deficit of nearly $208m. This starkly contrasts with the previous year's loss of about $7.9m. Additionally, sales and administrative costs surged by 22.1% to around $118.4m This translates to a net loss margin of -67%. The EBITDA margin, which correlates the annual financial statement adjusted for interest, taxes, and depreciation with the achieved turnover, stands at -4%. The net loss per share is $3.20.

Bleak days ahead

Revenue forecasts for 2024 have been trimmed down to a range of $260m to $270m. Through amended credit arrangements, cash flow from business operations, and potential asset sales, liquidity is anticipated to stabilize the business. The company envisions further progress in implementing the initiated Five-Point Plan. This strategy encompasses expanding the profit margin (through process optimization), tangible cost reduction, disciplined cash management, asset disposals, and debt reduction while augmenting sales in core brands.

The US conglomerate Constellation Brands has published its figures for the past fiscal year 2023 (March 1, 2022 to February 28, 2023). In the wine and spirits segment, both volume and sales declined compared to the previous year.

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