Marlborough Wine Estates Announces Capital Raising To Fund Growth
Award winning New Zealand wine company, Marlborough Wine Estates Group Limited (NZX: MWE), is seeking to raise up to $2 million in new capital to progress growth opportunities in both New Zealand and international markets. The funds raised through the Share Purchase Plan (SPP) will be used to retain higher inventory levels to meet expected future demand; investment into marketing, particularly MWE’s online strategy; and international market development.
The Issue Price for the Shares is 25 cents per Share, representing a 56.7% discount to the five day VWAP (volume weighted average price) during the last five trading days on the NZX prior to the Record Date.
Revenue and operating profit of MWE have both risen significantly since the company first listed in 2016, with revenue of $6.4 million and the first profitable financial year since listing for the year ended 30 June 2020. MWE’s most recent results for the six months to 31 December 2020 (which were released to the market on 11 February 2020) further demonstrate the growth of the business, with increasing sales of both its premium OTU and Music Bay brands.
In recent times, Marlborough Wine Estates has achieved significant commercial milestones including listing of its range in both of New Zealand’s largest grocery chains and establishing distribution relationships in multiple international markets. The company has seen rapid sales growth in New Zealand and has already shipped sizeable orders to new distributors in Australia, Canada, Malaysia and Singapore, with continuing orders from other international markets.
In addition, renowned winemaker, Jeff Clarke, has recently been appointed as Winemaker for OTU Estate Wines. The Board has also been strengthened with the appointment of independent director, Christine Pears, who has more than 20 years leadership experience in the wine industry.
Demand for New Zealand wine continues to grow and MWE is well positioned to capitalise on this.
There is continuing strong demand for quality New Zealand wine in international markets, particularly New Zealand Sauvignon Blanc, with annual exports increasing 8% to NZD $1.99b for the 12 months ended 30 November. Australia, the UK and the USA are the three biggest export markets for New Zealand wine. For the 12 months ended 30 November 2020 (NZD), New Zealand wine exports to the USA rose 6.6% to $622.9m; the UK increased 16.5% to $516.7m; and Australia was up 7% to $384.7m. MWE has established distribution relationships in a number of markets, with further opportunities to expand and build its distribution network.
In New Zealand, 60% of wine is sold through Grocery. MWE has recently achieved listings in both of New Zealand’s largest grocery stores and has seen strong growth in demand for its wines in recent years, a trend which it expects to continue.
In addition, a growing number of consumers are buying wine online, directly from the winery, a trend that has been further reinforced during the COVID lockdowns. This represents a future opportunity for MWE.
2021 Growth Focus
MWE has identified four key growth areas which it will focus on over the next 12 months:
· Further growth in the NZ market: Strengthening MWE’s partnership with both Foodstuffs and Countdown and growing New Zealand revenue further.
· International markets: Development and expansion of business and distribution relationships in targeted markets, particularly USA, UK and Australia – the three largest export markets for New Zealand wines.
· Direct to market/online: Investment into digital marketing to grow MWE’s online presence and capture the direct-to-market consumer.
· Investigation of acquisition opportunities: MWE will continue to look for opportunities to grow by acquisition, expanding its supply and distribution channels.
The capital raising will ensure MWE has the funding and capacity to progress with these opportunities and provides MWE shareholders with an opportunity to participate and share in the growth of the company.
|Record Date of SPP||5pm on Tuesday 16 February 2021|
|Opening Date||Wednesday 17 February 2021|
|Closing Date||5pm on Friday 5 March 2021|
|Allotment and Settlement of Shares||Friday 12 March 2021|
|Commencement of trading in shares on NZX||Friday 12 March 2021|