Australian Vintage reports steady first-half sales and outlines a robust strategy focused on innovation, portfolio diversification, and global expansion to meet full-year growth targets.
- H1 sales stable with slight 1.7% decline, on track for FY26 growth guidance
- Net debt steady at $110 million, aligned with market expectations
- Strong momentum from Poco Vino and Lemsecco Spritz driving global expansion
- Acquisition of MadFish enhances UK portfolio with premium and white varietals
- New Invivo distribution partnership to boost UK and European revenue in H2
Steady Performance Amid Industry Shifts
Australian Vintage Limited (ASX:AVG) has delivered a largely stable first half for 2026, with sales dipping marginally by 1.7% compared to the previous year. Despite this slight decline, the company remains confident in achieving its full-year sales growth guidance, underpinned by a strategic pivot towards innovation and portfolio diversification.
The company’s net debt position of $110 million aligns with prior guidance, reflecting disciplined financial management even as it invests in new growth avenues. These investments, while impacting cash flow in the first half, are expected to fuel a stronger second half and deliver cash flow neutrality excluding further investments.
Innovation and Acquisitions Fueling Growth
Key to Australian Vintage’s turnaround is the rapid expansion of innovative products such as Poco Vino, a disruptive small format wine that has quickly gained traction across nine countries. With sales scanning approximately 12,000 bottles daily worldwide, Poco Vino is projected to contribute over $15 million in annual revenue. Similarly, the Lemsecco Spritz range has tripled sales year-on-year and is poised for launches in China and the USA, tapping into growing demand for lighter, sparkling beverages.
Strategic acquisitions also play a pivotal role. The recent purchase of the WA-based MadFish brand broadens AVG’s UK portfolio into higher price points and white varietals, aligning with shifting consumer preferences away from heavy reds. Additionally, a new distribution partnership with Invivo will see AVG take full control of the Graham Norton wine range in the UK and Europe, expected to enhance revenue streams in the second half.
Adapting to Changing Consumer Preferences
The global wine market is undergoing a notable shift, with consumers favouring lighter styles such as white, rosé, sparkling, and no- or low-alcohol options. Australian Vintage is capitalising on this trend by reducing reliance on red-heavy products, particularly in the sub-$10 segment, and expanding its presence in the no-and-low alcohol category. Brands like McGuigan Zero and Not Guilty are growing strongly, reinforcing AVG’s leadership in this emerging segment.
Operationally, the company is managing oversupply challenges by exiting vineyard leases and not renewing certain contracts, thereby rebalancing inventory and reducing exposure to excess red grape varietals. These measures, alongside capacity optimisation reviews at Buronga Hill Winery, aim to improve margins and operational efficiency.
Looking Ahead
Australian Vintage’s first half EBITDAS was break-even, impacted by one-off accounting adjustments and foreign exchange effects. The derecognition of a $10 million deferred tax asset, while notable, does not diminish the company’s substantial cumulative tax losses available to offset future profits. With strategic investments set to bear fruit in the second half, AVG is well-positioned to capitalise on evolving market dynamics and deliver on its growth ambitions.
Bottom Line?
Australian Vintage’s innovation-led strategy and portfolio reshaping set the stage for a pivotal second half in FY26.
Questions in the middle?
- How will the Invivo distribution partnership impact revenue and market share in Europe?
- What are the risks associated with the ongoing inventory reduction and vineyard lease exits?
- Can Poco Vino and Lemsecco Spritz sustain their rapid growth amid increasing competition?