Treasury Wine rejects profit allegations

Treasury Wine Estates Ltd has rejected a research report that alleges the Australian winemaker has inflated its profits.

Hong Kong-based GMT Research says Treasury’s profits may have been inflated by as much as 50 per cent during the past two years.

It alleges the world’s largest stand-alone winemaker used acquisition accounting to write down inventories, and raised concerns about the difference between operating cash flow and profit.

Treasury Wines said on Thursday in a statement to the ASX the report was “false and misleading”, and it would respond specifically to the claims when it announced its preliminary annual results on August 15.

Treasury shares quickly recovered from a 7.7 per cent drop in morning trade after the company’s rejection of the claims, climbing as much as 1.8 per cent to $16.85.

Reuters has not seen the full report, except for a brief of its content on the Hong Kong-based company’s website.

In May, the owner of the Penfolds, Beringer and Wolf Blass labels faced a short call from a US-based hedge fund manager.

Its stock price tumbled after the company revealed chief executive Michael Clarke had sold some of his shares a week before the short scare.

In Thursday’s ASX release, Treasury also reaffirmed its guidance for the year.


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