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TWE - Treasury Wine Estates

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@robbooker This can't be THE Rob Booker who loves traders all over the world. I won't believe it until he posts a chart with a missed pivot and his favourite indicator.
 
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SP is now at 12 month low!!

ASX announcement late yesterday
28/01/2020 6:33:13 PM 1H20 Profit Report, Revised F20 Guidance & Presentation
https://www.asx.com.au/asxpdf/20200128/pdf/44dkp136xjxh23.pdf


Treasury Wine first-half earnings numbers have been impacted by weak trading conditions in the United States. The group is expecting a 5% increase in first-half net profit after tax (NPAT) to $229.2 million.

Treasury Wine is forecasting a 6% increase in earnings before interest, tax and self-generating and regenerating assets (EBITS) to $366.7 million.

The big factor for SP drop has been an increase in US luxury cost of goods sold (COGS) and Australian commercial COGS. Treasury Wine is unable to recover these costs, which have eaten into its first-half profits.

TWE is forecasting EBITS growth of 5% to 10% in FY20 compared to its previous 15% to 20% guidance range. It also revised its FY21 forecast growth to a 10% to 15% range in yesterday’s announcement.

The Board has determined to pay an interim dividend of 20 cents per share, fully franked, up 11% on the previous corresponding period (pcp).

Treasury Wine Estates will host an investor and media webcast and conference call commencing at 9:00am (AEDT) on 29 January 2020 (dial-in details below). The webcast and presentation material will be available at www.tweglobal.com. A replay of the presentation will also be available on the website from approximately 1:00pm.


039
 
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Wow, looks like TWE's share price has been "right sized*" for the lower than expected future growth.


* I dislike the jargon used by the CEO in his report, "premiumisation" strategy.
 
Sounds like another Masters or Bunnings UK disaster in the making, how many times have Aussie companies tried to break into established O/S markets and had to write off $millions?
NAB into U.S banking, Telstra into HK mobile phones etc.
 
Finished on it's low at $12.35...
Down $4.33 or a smidge off -26%
I have been surprised by it's run up, but definitely was the unloved child today!
A few interesting late trades also...
would post a picture, but don't know how?


Cheers
F.Rock
PS, finally worked out how to post a picture...
 
oh well, hoping to be able to pick up 2017 Wynns Coonawarra Shiraz for $11 ($10.40 in a half dozen) for a few more weeks. Cellars well, still.

A double whammy with China market being belted, right now.
 
I guess the trick is finding an entry point, they have a very good stable of brands, so one would think eventually they will turn it around.
Unless of course this is just a continuation of the change in consumer priorities, that we have been discussing in the thread 'retail wreckage'.
Maybe people are moving away from the snob value of high price wine, same as the move away from designer shoes, clothes, phones etc and are just buying for the buzz not the perceived flavour?.

Good article today in the SMH regarding the Treasury wines result.

https://www.smh.com.au/business/com...with-a-pounding-headache-20200129-p53vtq.html
 

I don't keep my eye on TWE because it's not a stock I am interested in owning. I did listen to an interview with a fund manager recently who picked it as a stock to invest in because she sees it as an emerging global branding and marketing behemoth in the wine industry. That got me interested because I started thinking about how concentrated the beverage industry has become around a few multi-national giants and the same thing is happening in dairy and I did have a look at the chart just recently.

I don't know what it is about the wine industry but for some reason it has always seemed to suffer from a glut of supply at the mass market end. Which is interesting because traditionally it is one of the most capital intensive forms of agriculture on a per acre basis (although I guess agriculture is getting more and capital intensive). Trellising up vines and producing wine is capital intensive. There has been talk about Treasury channel stuffing (as discussed in the article) for a few years now. There were complaints coming out of China a couple of years back that in order for merchants to get their hands on the more scarce premium Penfolds label wines they were being forced by Treasury reps to also take on the cheaper stuff they didn't want to have and as I recall that lead to some pushback from the Chinese buyers and some holding up of imports.

Don't get me wrong. I love drinking wine (I just came inside after sharing a bottle of red with the neighbour), but don't know I would invest in it.
 
The bigger picture for WINE looking blurry: incrementally rising production, good recent vintages and declining consumption. Essentially a USA view but clearly TWE will be impacted. Wine likely to stay cheap for a while..

https://amp-cnn-com.cdn.ampproject.org/v/s/amp.cnn.com/cnn/2020/02/16/business/grape-surplus-cheap-wine-trnd/index.html?amp_js_v=a3&amp_gsa=1&usqp=mq331AQCKAE=#referrer=https://www.google.com&amp_tf=From %1$s&ampshare=https://www.cnn.com/2020/02/16/business/grape-surplus-cheap-wine-trnd/index.html

The poor report may have already been priced in, but don't expect a bounce.
 
Have been checking in with TWE and Kogan after their recent dumping.
The latter of the 2 seems to be the likeliest contender for a bounce back.
Starting to think, it won't be a bounce, more likely a slow retrace.
Like the ones that you miss, because they are slow....
Current market is hard to predict, so am remaining bearish hoping to snag opportunities as they appear.
However, a good news Ann on the right day, could make the above obsolete.
Need a few ducks lining up...!
F.Rock
 
Now FGL is no longer listed, it falls to the wine sector to roll with the market, perhaps.

Peter Filipovic, CEO, Carlton & United Breweries
 
TWE has struggled to rally with the market after the Covid selloff. The chart is looking much more bullish now and is "coiled" for a break-out.

I'm not interested in TWE for the sole reason that they rely on the Chinese market in order to grow their business. We've already seen that China will "quarantine" shipments on arrival and this makes it a "never to be traded" company for me.

 
struggle struggle with industrial ethanol (masstige)

Treasury Wine Estates has warned of a 21 per cent decline in earnings due to the impact of COVID-19 and telegraphed a potential demerger of Penfolds by the end of the 2021 calendar year. The first major update from new CEO Tim Ford says the wine maker expects earnings before interest, tax and agricultural accounting standard SGARA to be between $530 million and $540 million. The company had previously guided to EBITS growth of between 5 per cent and 10 per cent.

F20 EBITS has declined against the prior year by approximately 21 per cent for the group, with regional declines of approximately 14 per cent in Asia, 37 per cent in the Americas, 16 per cent in ANZ and 18 per cent in EMEA.
"While it is right to remain cautious on the near-term outlook, given uncertainty remains around the timing and pace of recovery in our key markets, we remain optimistic around our return to both margin and profit growth," says Mr Ford.
Click to expand...
- of course, it's only right an incoming CEO delivers the bad news

.... and,
On the potential demerger of Penfolds, the company says "work completed since the market announcement in April continues to validate the expectation that value will be created through a separate focus for both Penfolds and TWE’s other brands, globally". "Optionality exists as to the best operating model to extract that value, including a potential demerger by the end of calendar year 2021."
 
peter2 said:
I'm not interested in TWE for the sole reason that they rely on the Chinese market in order to grow their business. We've already seen that China will "quarantine" shipments on arrival and this makes it a "never to be traded" company for me.
Click to expand...

I hope some ASF members avoided getting hit by China's latest political salvo that has sent TWE shares plunging.
 
peter2 said:
I hope some ASF members avoided getting hit by China's latest political salvo that has sent TWE shares plunging.
Click to expand...

Unfortunately I was holding. Stop hit, small loss...moving on.

It's funny how you get a run of these shocks sometimes. I have been stopped out of 3 over the past few weeks, whacked by announcements. Luck changes... both good and bad. Just part and parcel of the process.
 
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