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Profit leap signals start of something big for Xanadu

Western Australia producer Xanadu says it intends to become Australia's 'next great mid-sized wine company exporting to the world', and aims to exceed consumer expectations in every price point it competes in.

The vision – given to decanter.com in an exclusive statement by Xanadu Wines’ md Andrew Moore – comes after the wine company posted record net profits of AUS$2.15m (€1.2m) for the financial year ending June 2002.

‘If someone buys a AUS$12 (€6.6) Xanadu product they should feel like they’re getting a AUS$20 (€11) product,’ Moore said. ‘We want to over-deliver in terms of expectations at the pricepoint.’

Worldwide distribution has been a key factor in Xanadu’s success, with the UK market playing a major role in the company’s 220% growth in wine sales.

Last financial year, Xanadu exported AUS$5m (€2.78m) worth of wine, of which 50% was sold in the UK. ‘The UK market is Xanadu’s most significant market in terms of case sales for export,’ Moore said.

The acquisitions of McLaren Vale producer Normans Wines in October 2001 and Barossa Valley’s Next Generation Wines in July 2002 gave the Margaret River based wine company a major presence in some of Australia’s top wine producing regions. Company revenue has soared from AUS$6.3m (€3.5m) to AUS$16.4m (€9.1m), with volume increasing from 44,000 cases in 2001 to 225,000 today.

Future growth will involve building on key export markets, Moore says, with total exports in 2002 expected to represent 60% of sales. Xanadu aims to increase UK sales fourfold by the end of the next financial year.

‘We will also be identifying further acquisitions that add value to Xanadu’s current portfolio, most likely in Western Australia,’ Moore said.

By 2005, and based on Xanadu’s current brands, Moore expects to be selling almost three times what the company does now, with sales revenue more than doubling to AUS$37m (€20.6m).

‘Xanadu is now well positioned to achieve all targets in place,’ Moore said.

Written by Tracey Barker in New Zealand24 September 2002

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