Portfolio Update: Purchase of Treasury Wine Estates (ASX: TWE)

Portfolio Update:
Purchase of Treasury Wine Estates
(ASX: TWE)

25th July 2025

Across the Australian Equity component of investor portfolios (Income Tilt), we have bought Treasury Wine Estates (ASX: TWE).

TWE is a wine producer with global operations. Key end markets include Australia, Asia, the Americas, and Europe. The Group has a diverse range of brands; some of its most well-known include Penfolds in Australia and Asia, DAOU and Frank Family Vineyards in the US.

Investment Rationale:

Strong brands, led by Penfolds.
Pricing power in flagship luxury brands.
Emerging trend of consumers trading up to more premium wines.
High dividend yield.

Key Drivers of Value:

Penfolds – A famous and distinctive Australian wine brand. Leveraging this strong brand and increasing the distribution of Penfolds globally increases the scarcity of their wines and enables them to grow both volumes and price driving strong earnings growth.

Improved US Distribution Arrangements – TWE has announced its new distributor in California, the most important wine market in the US. This should lead to improved performance of this division as their previous distributor experienced significant performance issues leading to the closure of their operations in California.

Capital Management – The company announced a buyback at the recent trading update as their shares price is materially below fair value. This increases leverage to improving business performance.

Portfolio Changes:

The position in TWE has been funded through the sale of Dexus (ASX: DXS).

Additionally, in preparation for the August reporting season, we have repositioned the portfolio to enhance income generation. We are increasing our allocation in a number of names, including Ampol, Amcor, Rio Tinto, and Worley. To fund this, we have reduced our weightings in APA, Mirvac, and Endeavour Group.

As always, thank you for your continued support. If you have any questions or would like further information, please contact your adviser.

Warnings and disclosures

This material has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this material is General Advice and does not take into account any person’s individual investment objectives, financial situation or needs. Before making an investment decision based on this advice you should consider whether it is appropriate to your particular circumstances, alternatively seek professional advice. Where the General Advice relates to the acquisition or possible acquisition of a financial product, you should obtain a Product Disclosure Statement (“PDS”) relating to the product and consider the PDS before making any decision about whether to acquire the product. You will find further details of the service we provide and any cost to you within the Financial Services Guide. Any references to past investment performance are not an indication of future investment returns. Prepared by EP Financial Service Pty Ltd ABN 52 130 772 495 AFSL 325 252 (“Elston”). Although every effort has been made to verify the accuracy of the information contained in this material, Elston, its officers, representatives, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this material or any loss or damage suffered by any person directly or indirectly through relying on this information.