Treasury Wine Estates has gone from problem to golden child in just two years since Michael Clarke took over as CEO.
Yesterday the company, which owns some of Australia’s most famous brands, including Penfolds, Wolf Blass, Rosemount and Lindeman’s, announced that its profit had more than doubled, sending the share price up around 11% too.
Net profit after tax rose 131% to $179.4 million thanks in part to a 20% jump in sales revenue to $2.23 billion, with strong demand from Asia. Earnings per share doubled to 25.1 cents.
Wine volumes are up 11.5% too.
Only two years ago Australia’s biggest wine group had a $260 million write down its assets, with a global glut in bulk wine hitting the bottom line hard.
But since the business was spun off from its beer-making parent in 2011, TWE been concentrating on fewer, more prestigious labels as part of a “masstige” wine (quality mass appeal).
And the photo above of a 1997 newspaper ad by a Sydney retailer shows how far the company has come, with rises in the prices of some of the company’s better wines rivaled only by the city’s real estate prices.
At the bottom end of the range, Koonunga Hill remains one of the great bargains. Two decades after it sold for $8.99, you can still by it for just $9.99, a price rise of a little over 10%.
Others such as 389, the wine dubbed “Baby Grange” because it’s matured in old Grange barrels, has jumped more than 350% in price, from just under $19 to around $75 today at case price. The 2013 vintage has had such rave reviews, it’s already largely sold out, which may tempt Treasury to up the $80 RRP next year.
The 407 cabernet is another red that’s skyrocketed in price over 19 years – you’ll get it for about $72 by the dozen, an increase of 423% on the $17 back when Savage Garden’s “Truly Madly Deeply” was the No. 1 hit.
The other increases are more modest: expect to pay $36 (RRP $40) for Bin 28 shiraz, $35 for the Bin 128. Nowadays, St Henri changes hands for around $90, another 350% increase from $26 back then and Magill Estate shiraz has gone from $40 to $130.
And while it’s not on there, Business Insider has memories of handing over $200 for bottles of Bin 95 Grange in that era. Expect to pay around $750 for the current 2011 vintage. Or you could save $100 and find a bottle of the 1992 – the vintage released in ’97 – on the second-hand market to get an idea of what Penfold’s calls “the rewards of patience”.
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