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Glut will not halt UK plans

WA’S largest privately-owned wine company Evans & Tate has become the first Margaret River winery to list on the Australian Stock Exchange.

The company closed its $26 million initial public offer fully subscribed.

The bulk of the money will pay for the purchase of neighbouring Margaret River winery Selwyn Wines, allow Evans & Tate to expand into overseas markets, further develop product lines and reduce debt.

The UK has been earmarked as one of the company’s major target markets.

Selwyn Wines owner Mike Calneggia and Evans & Tate executive chairman Frank Tate will retain 58 per cent ownership of the company.

Mr Calneggia said while there was a worldwide glut of wine, it was a glut of “very ordinary wines”.

“There is a shortage of quality wines in the market,” he said.

“The Australian wine industry now captures 15 per cent of the UK business, which is moving away from volume and towards quality. We see our opportunities in the UK market to be in the premium to super premium range.”

Evans & Tate’s sale revenue has grown on an average compound basis of about 25 per cent since 1988 and recorded consistently high profit margins.

Last financial year the winery had revenues of $12.3 million and earnings before interest and tax of $2.8 million while Selwyn Wines produced revenue of about $6 million.

The combined business projects a turnover of $19.6 million in 2000, rising to $23.5 million in 2001.

Net profit after tax is forecast to be $2.29 million in 1999-2000, rising to $3.33 million in the next year.

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