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.