Petaluma Limited earned a net profit after tax of $3.03 million in 1995/96, a 9.7% increase on the 1994/95 profit of $2.76 million. Total revenue for the group was $25.84 million. The company was able to increase both sales volumes and prices for its core brands, which include the recently acquired Tim Knappstein Wines and Mitchelton, however the revenue gains were offset by the elimination of low margin products from the Mitchelton portfolio. Executive Chairman Brian Croser links costs associated with the 1995 vintage to a brake on the group’s margin growth in 1996/97, although the company appears to have successfully rationalised the Mitchelton portfolio and has increased the Petaluma brand’s sales and prices. According to Croser the small crop from 1995, nevertheless of very high quality – a weather-dependent outcome – greatly increased the company’s unit costs. The company would expect a better result from 1996, since early indications would suggest a crop of comparable quality to 1995, but significantly larger. The Petaluma group processed more than 6,000 tonnes of fruit in the 1996 vintage, compared to 4,950 tonnes in 1995. Croser expects the benefits of this large crop, plus the price increases and brand repositioning to flow into the company after the 1996/97 financial year. Petaluma Limited’s directors recommended a fully franked dividend of 21 cents per share to be paid for the full year, against a dividend of 20 cents for 1994/95.
