07/11/2007 - 15:40

Palandri listing on the way after $2.2m profit

07/11/2007 - 15:40

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Australian Securities Exchange-bound wine producer Palandri Ltd has reported a 2006-07 net profit of $2.2 million, with the bulk of its revenue generated from managed investment scheme fees and asset revaluations.

Australian Securities Exchange-bound wine producer Palandri Ltd has reported a 2006-07 net profit of $2.2 million, with the bulk of its revenue generated from managed investment scheme fees and asset revaluations.

Total revenue was $54.5 million of which sales from bottled and bulk wine was $4.7 million.

Palandri generated gross profit from bottled wine sales of $656,566, up from $448,186 the year earlier but posted a loss of $296,400 on the sale of bulk wine compared to a $4,710 profit in 2005-06.

In a statement released by Palandri, Darrel Jarvis said the winery had successfully focused on improving its margins and it was realising an increase in the average price per case and average price per bottle.

The Margaret River winery's net profit of $2.2 million is down 47 per cent on the $4.2 million profit it posted last year, a result which benefited from a restructuring of the group's activities.

The business has again restructured its books in a bid to simplify its structure ahead of a stockmarket float, which it has flagged could be pushed out to early in 2008.

Palandri delisted from London's Alternative Investment Market almost a year ago with a view to list on the Australian stock market this year.

Palandri recorded $24.2 million in revenue from wine production and marketing fees related to its managed investment schemes, up $3.3 million on last year.

It has also revealed that it has entered into an agreement with a "significant creditor to settle amounts due at the balance sheet date". The company said the settlement is conditional upon its ASX listing and if conditions of the settlement were not met the creditor had the right to purchase, via an option agreement, key viticultural assets of the group.

Palandri also said that if it met its "capital raising targets" as part of its stock market float it would repay a loan facility, which stood at $11.8 million at June 30. However, it said if its listing did not proceed the financier would work with Palandri "to agree a satisfactory exit strategy by July 1 2008".

Mr Jarvis said it had taken longer than anticipated to restructure Palandri's existing operations into a more traditional wine company, something it needed to do before listing on the ASX.

The restructure has included restructuring the managed investment businesses into unit trusts.

Mr Jarvis said considerable effort had gone into repositioning the company's wine range to deliver increased sales volumes from 2008 onwards at higher price points with higher margins.

He said the company had continued to expand the reach and its brand with new markets including Eastern Europe delivering results.

Mr Jarvis said it had made substantial investments in WA during the year, which would position the company well in the future as dry conditions in many parts of Australia reduce grape supplies. The company issued a further 24.3 million shares in the year to raise $4.5 million.

Mr Jarvis said he expected wine producers would be able to command price increases in the next few years as widespread drought conditions impact large parts of the industry.

 

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