Australian Vintage Posts $257M Revenue, Eyes 5-7% Sales Growth in FY26

A Year of Transition and Strategic Refocus

Australian Vintage Limited (ASX – AVG) has delivered a FY25 financial performance marked by resilience and strategic repositioning. Despite a slight 1% decline in sales to $257 million, the company improved its earnings before interest, tax, depreciation, amortisation, and significant items (EBITDAS) to $15 million, signaling a directional improvement in profitability and cash flow.

Chairman James Williamson highlighted the company’s renewed focus on free cash flow generation and sustainable growth. The board’s decisive actions to reduce fixed grape supply commitments and streamline costs are already bearing fruit, setting the stage for a turnaround after several years of revenue decline.

Innovation at the Forefront

CEO Tom Dusseldorp, appointed in May 2025, has been instrumental in driving innovation-led growth. The launches of Poco Vino and Lemsecco represent a bold pivot towards lighter, lower-alcohol varietals that appeal to evolving consumer tastes. Early sales of Poco Vino have exceeded expectations, with over 100,000 bottles sold in Australia and New Zealand shortly after launch, and confirmed listings in seven global markets.

These innovations are not without cost; significant working capital has been invested in infrastructure, including a local bottling line to meet demand and reduce supply chain expenses. However, the company remains confident that these investments will underpin strong revenue growth, with FY26 net sales from Poco Vino alone expected to reach $15 million.

Strategic Acquisitions and Market Expansion

Australian Vintage has also expanded its portfolio through the acquisition of the MadFish brand and secured distribution rights for the iconic Howard Park wine brand across the UK, Ireland, Europe, and Canada. The recent buyout of MadFish’s UK distributor grants AVG full control over sales in this key market, opening opportunities for further growth.

These moves complement the company’s existing global footprint and align with its strategy to leverage core brands while pursuing new growth spaces. The company anticipates that these initiatives will contribute significantly to revenue and margin expansion in FY26 and beyond.

Operational Efficiencies and Sustainability

Operationally, Australian Vintage is transitioning from a fixed-cost wine supply chain to a more flexible, variable model by exiting high-cost grape leases and reducing inventory levels. This shift is expected to enhance cash flow and reduce financial risk over the coming years.

On the sustainability front, AVG continues to make meaningful progress, reducing greenhouse gas emissions by 13% year-on-year and closing its gender pay gap. The company maintains its B Corp certification and has been recognized for its environmental initiatives, underscoring its commitment to responsible business practices.

Looking Ahead

For FY26, Australian Vintage targets 5-7% sales growth, with a notable shift in sales distribution favoring the second half of the year. While first-half sales are expected to be flat, driven by the ramp-up of new innovations, the company forecasts significant deleveraging and free cash flow generation in H2 as cost-out programs take effect and sales momentum builds.

Net debt is projected to remain broadly stable year-on-year, reflecting upfront investments in acquisitions and innovation. The company’s disciplined approach to expenditure and focus on leveraging its strengths position it well for sustainable growth and shareholder value creation.