Australian Vintage Narrows FY25 Loss to $9.6M, Eyes 5-8% Growth in FY26

FY25 Financial Performance

Australian Vintage Ltd (ASX – AVG) closed the 2025 financial year with a total operating revenue of $257.2 million, a slight 1% decline compared to the previous year. Despite this, the company reported a significant improvement in profitability metrics, with earnings before interest, tax, depreciation, amortisation and SGARA (EBITDAS) rising to $15.4 million, and a net loss after tax narrowing dramatically to $9.6 million from a staggering $93 million loss in FY24.

This improvement was achieved amid challenging global conditions, including inflationary pressures and a one-off $6.1 million cost related to the UK’s new Extended Producer Responsibility (EPR) waste management legislation. Australian Vintage expects to recover ongoing EPR costs through price increases.

Strategic Renewal and Leadership Changes

The company underwent a significant board renewal in 2024, welcoming new directors with deep industry and financial expertise, including Chairman James Williamson and Non-Executive Directors Margaret Zabel, Michael Byrne, and Elaine Teh. Leadership changes culminated in the appointment of Tom Dusseldorp as CEO in May 2025, signaling a fresh strategic direction focused on free cash flow generation and return on capital employed (ROCE).

The new leadership team has prioritized stabilizing core brand sales while aggressively investing in innovation and premiumisation to capture evolving consumer preferences, particularly in export markets.

Innovation-Led Growth and Market Expansion

Australian Vintage is leveraging its position as a global leader in the no- and low-alcohol wine segment, with brands like McGuigan Zero and Not Guilty driving growth. The FY26 outlook is buoyed by two key innovations – Poco Vino and Lemsecco. Early sales of Poco Vino in the UK have exceeded expectations by four times, prompting an upgrade in FY26 sales forecasts to $15 million and $6 million respectively.

Geographic expansion plans are ambitious, targeting new markets including New Zealand, Thailand, Malaysia, China, the USA, Indonesia, the Philippines, and the Middle East. The company is also finalizing distribution rights for premium brands such as MadFish and Howard Park in key international markets, further diversifying its portfolio.

Operational Efficiencies and Financial Discipline

To support growth and improve cash flow, Australian Vintage is reducing fixed grape supply commitments by exiting leases at Millewa and Balranald vineyards, which will reduce annual grape sourcing costs by approximately $7 million. Inventory levels remain elevated at $220 million but are expected to decline significantly over FY26 and FY27 as vintage intake peaks and excess stock is managed down.

The company’s net debt increased to $75 million at year-end, reflecting ongoing investments and inflationary pressures, but management is targeting a free cash flow neutral position by the end of FY26, with positive cash flow generation expected thereafter.

Sustainability and Risk Management

Australian Vintage maintains strong environmental, social, and governance (ESG) credentials, having achieved B-Corp certification in FY24. The company actively manages risks related to global inflation, changing consumer preferences, climate change, and foreign exchange volatility through long-term contracts, hedging strategies, and operational adjustments.

Despite the challenges, the company’s strategic focus on innovation, premiumisation, and operational efficiency positions it well to capitalize on shifting market dynamics.