On Friday, Canadian wine and alcohol beverage producer, Diamond Estates Wine & Spirits Inc., was in high spirits after a promising look at their FY2017/Q42017 earnings report. Along with a third-party audit by PricewaterhouseCoopers LLP, Diamond is positioning themselves for a strong future.
FY2017 numbers shows revenues increasing by 17.5% from 29.2 million in FY2016 to 34.3 million in 2017 due to impressive growth in export sales for their winery division. Gross Margins increased to 41.5% revenue, compared to 40.6 in FY2016. This was, in part, because of increased export revenues and reduction in promotions in the LCBO channel. A partial offset by a decline in gross margin in the agency division is indicative of a clearing out of excess inventory.
EBITDA1 rose 84.9% to 2.8 million, as compared to 1.5 million in FY2016 has the company leveraging their recent increase in sales to their benefit. Although Diamond reported a modest $0.5 million Net Income, this compared to last year’s Net Loss of $1.7 million paints a positive picture of uphill movement sure to give many long-time shareholders a sigh of relief.
“Fiscal 2017 was a landmark period for Diamond Estates,” said Murray Souter, who is the President and CEO of the Canadian-based spirit company. "The introduction of wine into Ontario grocery stores is a transformational event for our industry, and we are positioned as one of the three largest suppliers to the grocery channel with approximately 12% market share. Our financial performance also improved significantly during the fiscal year as we experienced very strong demand for our products at home and abroad, and benefited from enhanced operating leverage. In December 2016, we completed a very important equity financing that improved our balance sheet and positioned us to execute on our growth plans. Among those is the important capacity expansion project at the Lakeview winery, which we initiated in the spring."
Q4 2017 Revenue results paint a less prosperous picture, with no change in Revenue, until you factor in a Gross margin increase of 39% of revenue, compared to 31% in Q4 2016.
Diamond Estates Wine and Spirits Inc is looking good after today’s earning reports and have a bright future ahead of them, considering the increase in Canadian wine consumption. Optimism breeds optimism and outlook is good!