Not so sweet
Foley Family Wines reports interim loss
Foley Family Wines, whose brands include Vavasour and Martinborough Vineyard, turned to a loss in its first half as it battled falling wine sales and the aftermath of last year’s Kaikoura earthquake.
The net loss of $323,000 in the six months to December 31 compares with a $1.6 million profit a year earlier.
Revenue dropped 5.4 per cent to $16.6m, with bottled wine sales down 15 per cent to $14m.
Case sales dropped 17 per cent to 179,000 dozen, with the Australian and New Zealand markets accounting for 90 per cent of the decrease, it said. The strong kiwi dollar, particu- larly against the British pound, also had a material impact.
FFW warned investors of a challenging period ahead in November, after the quakes caused significant damage to storage tanks at its Grove Mill winery in Marlborough, with some bulk wine lost.
The company, whose chairman is American billionaire Bill Foley, booked a $989,000 cost from the insurance excess, turning a first-half net profit into a reported loss, it said.
The winery will be repaired in time for the 2017 vintage.
“The last six months have been extremely challenging for the company. Besides the actual damage inflicted by the earthquake, getting the winery operational has been very distracting for our small team,” said chief executive Mark Turnbull.
“The currency has compounded the problem of profitability of some markets and with a large vintage in 2016 many businesses are not in a position to increase pricing.
“We are determined to have a much stronger second six months and return the company to a growth path.”
The NZAX-listed company’s share price closed yesterday unchanged at $1.50.