Niche Markets Fuel Growth for Andres

Article Excerpt

ANDRES WINES LTD. $27 (Toronto symbol ADW.A (old symbol ADW.NV.A); Income Portfolio, Consumer sector; SI Rating: Above average) is Canada’s second-largest producer of wine, after Vincor International (which is now a subsidiary of U.S.-based Constellation Brands, Inc.). Andres sells its products through provincial government liquor stores, and through its own chain of 102 retail outlets in Ontario. The company’s sales grew from $139.0 million in 2002 (fiscal years end March 31) to $211.8 million in 2006. Earnings rose from $1.15 a share (total $5.3 million) in 2002 to $2.01 a share ($9.6 million) in 2004. Restructuring costs cut Andres’ income to $1.77 a share ($8.5 million) in 2005, and to $1.25 a share ($6.05 million) in 2006. Disregarding unusual items, Andres earned $1.50 a share in fiscal 2006. In the past few years, the company worked at expanding in premium wines, which generate higher profit than lower-priced wines. Andres has also expanded into niche markets, such as craft beers and home winemaking kits. While…

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