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Vintage Wine Estates stocks drop to record low after surprise loss
Shares of Vintage Wine Estates plummeted 40.1% on Wednesday to a record low, after the wine group reported a shock fiscal fourth-quarter loss.
With brands including Layer Cake, Clos Pegase and Bar Dog, the Nevada-based Vintage Wine Estates (VWE) is one of the fastest growing wine producers in the US.
However, feathers were ruffled this week when the company revealed a fourth-quarter net loss of US$14.7 million or 24 cents per share, from US$6.1 million, or 18 cents a share, in the same period last year.
CEO and founder Pat Roney appeared upbeat in the face of the loss, saying: “We are executing well on our strategy to drive growth, are successfully diversifying and expanding our portfolio and upgrading our capabilities and capacity. As an organisation, I believe we made great progress in our first year as a public company even in the face of supply chain constraints and significant cost pressures due to rapid inflation.”
Cracks in the armour showed when he admitted that the company had been undergoing a process of “establishing an improved accounting structure,” which includes “a stronger accounting and finance team under a new chief financial officer as well as the addition of several other key leadership positions”.
Roney suggested that the processes that had been implemented in order to “work towards remediation of our material weaknesses” is what “drove the non-cash adjustments in the quarter”.
Over the longer term, the CEO expects that these changes will “not only improve the quality of our financials, but enable greater consistency and transparency moving forward.”
New chief financial officer Kristina Johnston, who joined VWE in March 2022, commented: “We have instituted improved accountability metrics, updated assumptions for overhead absorption processes better reflecting the current business and created greater discipline around timeliness in reporting throughout the organisation”.
The producer also revealed it is aggressively pursuing acquisitions to bolster the company’s position moving forward.
“We are actively advancing our acquisition pipeline and believe that fiscal 2023 will be another strong year for VWE as we transform the company into a much larger, more significant player in the wine industry,” said Roney.