Foley Wines (FWL) H1 2025 earnings summary

Executive summary

• Operating profit before revaluations and tax rose to $2.03M, up 61.3% year-over-year, driven by strong export market development and premiumisation strategy.

• Net profit after tax fell 35.1% to $1.09M due to higher cost of goods from a smaller 2024 vintage and increased sales support investment.

• Bottled case sales grew 21% to 296,000, with significant gains in Australia (+37%), UK/Europe (+36%), and Rest of World (+108%).

• Operating cash flow surged 272% to $10.99M, enabling debt reduction of approximately $8M during the period.

• CEO Mark Turnbull announced his departure effective April 2025.

Financial highlights

• Revenue increased 12.6% year-over-year to $32.32M for bottled sales; total revenue reached $34.07M.

• Operating EBITDA rose 11.4% to $7.91M.

• Basic and diluted EPS were 1.65 cps, down from 2.55 cps in the prior year.

• Net tangible assets per share stood at $1.66, slightly up from $1.65 at June 2024.

• No interim dividend was declared.

Outlook and guidance

• Inventory is well positioned to transition to the 2025 vintage, which is expected to have a lower cost of goods and support higher gross margins.

• Downward pressure on Marlborough Sauvignon Blanc grape prices (expected ~15% lower for 2025 vintage) and interest rates may improve financial position in 2026.

• Early indications suggest higher yields in Marlborough and Martinborough, with Central Otago yields slightly lower but above long-term average.