Pernod uncorks vintage profit in NZ business

French spirits and wine maker Pernod Ricard has posted a $17.6 million profit from its New Zealand operations in its 2021 financial year, turning around the $10.25m loss it made in the prior period.

Milstream Equities, whose ultimate parent company is Pernod Ricard SA, owns a wide range of wine subsidiaries in New Zealand including Montana Group, Pernod Ricard Winemakers, Brancott Estate, Church Road Winery and Penfolds Wines.

Financial accounts for the year to June 30, 2021, posted to the Companies Office just prior to Christmas, show its sales revenue was $338m, up from $286m.

However, its cost of sales was also up, rising from $220m to $284m. That meant its gross profit fell from $65m to $54m.

But its financials were bolstered by a gain it made on the sale of property of $22.6m.

In July 2020 the firm signed an agreement to sell its Auckland production facility in Tamaki for $55m.

In November 2020 the Herald reported Pernod Ricard would close its Tamaki facility that bottles Brancott Estate, Jacob’s Creek and Stoneleigh wines, laying off all 90 staff .

Brett McKinnon, Pernod Ricard global operations manager, confirmed the move, citing that to “improve operational efficiency” it had made the decision to shut the site over the next 12 to 18 months.

As the sale was made after June 30 the proceeds were not recognised until the 2021 financial year.

Distribution expenses also rose from $7.36m to $10.89m while its marketing expenses also rose from $14.16m to $15.06m.

Other expenses were substantially lower in its 2021 year, falling from $30.2 to $18.9m .