Treasury Wine Estates chief executive Mike Clarke says the company is on the acquisition trail in the United States at the premium end of the market, as he reinforced his desire to keep running the company even if one of the two private equity suitors takes control.
He said momentum had improved in the troubled United States business and at the luxury end of the market Treasury had been caught out with a lack of supply in the US, which it wanted to rectify with acquisitions or alliances.
"There's been a limit to the amount of liquid we've had access to," Mr Clarke said.
He also revealed that he thought Treasury's disappointing 2013-14 financial results represented a bottoming out, and improvement was on the horizon as his new plans for overhauling the company began to bite.
"I would hope there's upside from here," he said, but he declined to make a specific profit forecast for 2014-15.
Treasury, which has received two separate $3.4 billion buyout proposals from private equity firms, earlier on Thursday revealed it had plunged to an annual bottom-line loss of $101 million after suffering heavy write-downs of $281 million. Mr Clarke said he wanted to continue as chief executive even if one of the private equity bidders were successful.
He said "people outside who are looking in" were right behind the fix-it plans and the trajectory of the business, and he wanted to see it through regardless of who the owners were.
"I think it's definitely do-able," he said.
Kohlberg Kravis Roberts and junior partner Rhone Capital made an increased bid for Treasury on August 4 of $5.20 per share, while TPG Capital made a similar offer of $5.20 per share a week later. They are both doing due diligence. Mr Clarke and his chief financial officer Tony Reeves are heading the internal deal team for Treasury as the private equity firms clamber through the inner workings of the company.
"We're trying to absorb the brunt of the work," Mr Clarke said, to shield others from any distractions.
When the write-downs were stripped out, Treasury's underlying earnings for the year declined 14.6 per cent to $184.6 million and the wine group was forced to rely on currency adjustments to reach a previously projected profit guidance band of $190 million to $210 million.
After adjusting for foreign exchange rates, earnings before interest, tax and the SGARA accounting standard was $193 million.
The biggest disappointment for the company was the Australian and New Zealand business which suffered a 32 per cent slide in earnings to $75.1 million. The Asian operations also slipped 12.3 per cent to post earnings of $47.7 million.
The company's troubled US business made a slight improvement when foreign exchange impacts were included, lifting earnings 12.1 per cent to $74.9 million. On a constant-currency basis, the Americas dropped 7 per cent.
The US has been a troubled part of Treasury and its predecessor Foster's Group for much of the past decade after Foster's splashed out $2.9 billion at the top of the market in 2000 for Beringer Wine Estates. To look for expansion in the US now under Mr Clarke may come as a surprise to the market.
The company also revealed it didn't end up destroying all of the low-end commercial wine it had earmarked for destruction last year in the US after being caught with too much stock. Mr Clarke revealed it only destroyed 240,000 cases of wine out of an original plan to crush 600,000 cases, and was selling the remainder through other channels.
Treasury, which owns Penfolds, Rosemount, Lindemans, Wolf Blass and Wynns among a collection of 83 brands, said total sales revenue for 2013-14 increased 1.0 per cent to $1.7 billion.
The company will pay an unfranked final dividend of 7¢ per share on October 2. This took the full-year dividend to 13¢, unchanged on the previous year.