• FY25 sales down 1% to $257 million, earnings and cash flow improvement
• Targeting +5% to +8% topline growth in FY26, driven by new brand innovations
• Inventory reduction expected in FY26-FY27 as grape supply contracts expire

Australian Vintage Ltd (ASX: AVG) today announced its full year 2025 audited results. Overall sales for the year were $257 million, down 1% from the prior year. However, the company's relentless focus on cost-out measures has seen earnings and cash flow improvement, with EBITDAS increasing to $15 million, EBITS to $1 million, and NPATS to -$6 million compared to FY24. A one-off expense of $6 million associated with the implementation of waste management legislation in the UK also impacted earnings. Going forward, the company expects these EPR costs to be recovered through price increases. For FY26, Australian Vintage is targeting topline growth of 5-8%, driven by the success of its new brand innovations Poco Vino and Lemsecco. These two brands are expected to be key growth drivers, with Poco Vino's sales forecast upgraded to $15 million and Lemsecco's to $6 million. The company also announced the strategic acquisition of the international ownership of the MadFish brand and the distribution rights for the Howard Park wine brand in several key markets. On the inventory front, the company expects a significant reduction in FY26 and FY27 as long-term grower contracts roll off and the company exits certain grape supply agreements. This will be a significant driver of free cash flow over the medium term. Overall, the company is focused on driving topline growth, generating free cash flow, and improving return on capital employed as its key strategic priorities.

For FY26, Australian Vintage is targeting topline growth of 5-8%, with Poco Vino expected to generate $15 million in sales and Lemsecco $6 million. The company also expects to achieve a free cash flow neutral position by the end of FY26, free cash flow generation of +$10 million in FY27, and +$20 million per annum in free cash flow generation by the end of FY28.

Australian Vintage believes FY26 will be a transformational year, with the company targeting topline growth of 5-8% and pivoting the group on a positive free cash flow trajectory. The company's new brand innovations, Poco Vino and Lemsecco, are expected to be key growth drivers, while the company also plans to leverage its existing export capabilities to expand into new markets across China, the rest of Asia, and the Americas.