The Treasury Wine Estates Ltd (ASX: TWE) share price is marching higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) global wine company closed yesterday trading for $12.11. In morning trade on Thursday, shares are swapping hands for $12.29 apiece, up 1.5%.
For some context, the ASX 200 is up 0.3% at this same time.
This outperformance comes following the release of Treasury Wine's full year financial results for the 12 months ending 30 June (FY 2024).
Here are the highlights.
Treasury Wine share price lifts amid dividend boost
- Net sales revenue of $2.74 billion, up 13.1% from FY 2023
- Earnings before interest, tax, SGARA and material items (EBITS) of $658 million, up 12.8% year on year
- Statutory net profit after tax (NPAT) of $99 million, down 61.1% from last year
- NPAT before material item and SGARA of $408 million, up 8.3% from FY 2023
- Final dividend of 19 cents per share, 70% franked, up from last year's final dividend of 17 cents per share
What else happened in FY 2024?
The Treasury Wine share price is moving higher today, with investors taking the widely expected 61.1% year-on-year profit decline in stride.
That decline was driven by a non-cash impairment charge of $354 million ($290 million post-tax) relating to the Treasury Premium Brands division.
On 6 August, the company reported it was selling a range of its lower-shelf brands, including Lindeman's, Yellowglen, Wolf Blass and Blossom Hill.
Despite the profit dip, Treasury Wine's full year dividend payout comes out to 36 cents per share. This represents 72% of the company's NPAT and is up 16% from the total dividends paid out in FY 2023.
Among the positives for the Treasury Wine over the financial year was the removal of tariffs on Australian wine imports into China. The company said it then immediately commenced the re-establishment of its Penfolds Australian COO portfolio in China through 4Q24. Treasury Wine said strong shipment demand from customers and initial depletions were in line with its expectations.
Corporate costs increased 4.4% from FY 2023, driven by general inflationary pressures.
What did management say?
Commenting on the results boosting the Treasury Wine share price today, CEO Tim Ford said, "Our fiscal 2024 performance reflects the excellent momentum we continue to build behind our Luxury brand portfolios in Penfolds and Treasury Americas, which now represent over 75% of Group EBITS."
Ford continued:
These two outstanding Luxury wine platforms have very clear strategic direction and execution priorities, and we have great confidence in both as strong drivers of long-term growth for Treasury Wine Estates.
In relation to our Premium brands, we are focused on improving the performance of this global portfolio to deliver greater value to TWE overall, with implementing key changes to enable the evolution to the new Global Premium division a key focus through FY 2025.
What's next?
Looking at what might impact the Treasury Wine share price in the year ahead, the company is forecasting FY 2025 EBITS in the range of $780 million to $810 million.
Management says this guidance reflects continued strong top-line luxury portfolio growth in Penfolds and Treasury Americas. Stability is expected across the rest of Treasury Wine's global brand portfolios
Treasury Wine share price snapshot
With today's intraday gains factored in, the Treasury Wine share price is trading just over 14% higher so far in 2024.
