Cosentino recovers as more wine drinkers join the club

Published January 8, 2008

Cosentino Signature Wines predicted improved trading gains as interest in wine club memberships helped push full-year sales growth up 35 per cent to about $11m (£5.6m).

The California wine maker has struggled previously, issuing two profit warnings in three months in 2006. But management changes, including the appointment of Larry Soldinger as chief executive and an improvement in relations with wholesalers, helped the group to recover in 2007.

Turnover increased 64 per cent in the first half of the year to $5.3m as losses were reduced to $264,000.

The Napa-based company, a small winery with sales of about 650,000 bottles, said yesterday that wholesale revenues had increased about 50 per cent year-on-year, which it said "reflected management's focus on distributor relationships throughout the year".

Retail sales experienced a year-on-year increase of more than 20 per cent, while the Cosentino Wine Club membership has risen to 6,640 from 5,438 in 2006.

The group, which experienced another excellent quality harvest in Napa Valley and the Central Valley, said: "The board remains confident in the future growth prospects for the business."

Mr Soldinger, the leading shareholder, blamed previous troubles on a lack of direction and management failings. These were compounded when the bottling of Cosentino's popular wine was delayed in 2005, leading to supply problems and a loss of confidence among distributors. The company also suffered from boardroom splits over its future direction. Mr Soldinger replaced Keith Smith as chief executive in February last year.

Shares in the Aim-listed company rose 2p to 271.2p, still well below a 125p flotation price when it listed in December 2005.

Results for 2007 are expected in April.