Profits rise at Accolade Wines on back of Sterling recovery

Accolade Wines UK saw profits more than double in the year to 30 June 2018, which it attributed to a better product mix and the recovery of Sterling.

Profits at the UK arm of the Australian wine giant rose 175% to 11,5 million, from £4,1 million in the financial year, according to accounts filed at Companies House last month, with operating profit quadrupling to £16,2 million from 4.8 million in 2017.

Turnover at the company, which was acquired by US private equity firm the Carlyle Group, for AU$1 billion (£548 million) last April, rose 0.72% to £477million. Accolade is owned by the Amphora Group Ltd, which was created by Carlyle for the Accolade businesses.

The directors attributed the increased to a better mix of products, as well as the recovery of Sterling.

“The recovery of GBP has reduced the cost of imported products, offset in part by the decrease of profit margins following the negative initial consequence of the Brexit vote.”

However it noted that gains in Sterling against other currencies had resulted in forex losses on the revaluation of foreign denominated bank and loan balances.

The company also noted impairments following write-down of £6.4 million in total – £1.9 million in intangible assets relating to non-core brands, which was identified in a strategic review, and £4.5m in investment. Going forward, the strategy is to concentre on the key high profile brands, it said.

The company also boosted its stock levels in anticipation of higher sales.

Bank loans of around £10million were repaid last year, as it said the company now had access to funding through Amphora and its related companies, who it said could draw on a 3301m loan facility. Loans were recoded at more than £28million

Accolade’s brands include Hardys, Kumala, Banrock Station, Mud House, Geyser Peak, and Echo Falls