Treasury Wines Estates Share Price Rises to $19.46 After Historical Profit is Announced

Treasury Wine Estates Ltd [ASX:TWE] have seen a rise in their share price after a jump in profits by 34%, with annual profits of $360.3 million.

At time of writing, TWE’s share price rose by 4.79% after an earlier slump. They have announced that they will increase dividend payments to 17 cents a share, up 4 cents from last year’s 13.

Why the sudden turnaround?

Treasury Wines, who owns premium brands such as Penfold’s and Wolf Blass, have consolidated their standing as the world’s biggest winemaker by announcing a record profit, driven by new investments and product development (including luxury wines) throughout Asia, Europe and the US.

Although TW’s performance was handed a set-back in the American market, earnings in Asia rose by 37% ($205.2 million), helped in large part by a rising demand in China for premium Australian and New Zealand wines.

Free Report: Discover four red hot ASX profit plays for 2018. Read Now

What is the outlook for Treasury Wines?

CEO Michael Clarke is resolute about the company’s outlook for FY2019:

FY19 is set to be an exciting year for TWE. We have the wine, the brands, the business models and the organisational talent to propel our Company into its next phase of growth that will see TWE become the world’s most celebrated wine company and deliver a 5yr EBITS CAGR of 25%.’

While the result is probably a welcome sigh of relief for investors, TWE’s future success will likely come down to how well they are able to transform their ‘premiumisation’ operations in the US and in Asia.

There are also existing concerns over whether regulations will make it harder to meet the growing demand in China, although Clarke is signalling that previous delays will have no effect on growth.

Investors will likely have to wait and see if TWE’s shift toward luxury wines will pay off.


Sam Volkering

For Money Morning

PS: If you’re interested in the latest ASX winners, analyst Sam Volkering has compiled his favourite stock choices for the year. Check out our free report, ‘The Four Best ASX Stocks for 2018’.

Sam Volkering is an Editor for Money Morning and is small-cap, cryptocurrency and technology expert.

He’s not interested in boring blue chip stocks. He’s after explosive investments; companies whose shares trade for cents on the dollar, cryptocurrencies that can deliver life-changing returns. He looks for the ‘edge of the bell curve’ opportunities that are often shunned by those in the financial services industry.

If you’d like to learn about the specific investments Sam is recommending in either small-cap stocks or cryptocurrencies, take a 30-day trial of his small-cap investment advisory Australian Small-Cap Investigator here, or a 30-day trial of his industry leading cryptocurrency service, Sam Volkering’s Secret Crypto Network here.

But that’s not where Sam’s talents end. Sam specialises in finding new, cutting edge tech and translating that research into how the future will look — and where the opportunities lie. It’s his job to trawl the world to find, analyse, research and recommend investments in the world’s most revolutionary companies.

He recommends the best ones he finds in his premium investment service, Revolutionary Tech Investor. Sam goes to the lengths of the globe and works 24/7 to get these opportunities to you before the mainstream catches on. Click here to take a 30-day no-obligation trial of Revolutionary Tech Investor today.

Websites and financial e-letters Sam writes for:

Money Morning Australia