Investor's Champion Blog
Provides refreshingly forthright, independent comment on predominantly small cap companies and specialist investment funds. Informed opinion, based on first-hand research, but pulls no punches in exposing management weaknesses.

Cosentino-another AIM wine company struggles

I see that another small wine producer is struggling on AIM.

Cosentino Signature Wines, the Napa based producer of luxury wines appears to be going through a torrid period. Since announcing widening interim losses in September it announced in November that wholesale sales had been even lower than expected and that debt has risen to US$22.5 m, the limit of its existing available facilities. The fact that it also announced that discussions were ongoing in seeking a buyer for non-core assets worth around US$10m probably spooked investors even more.

One has to question whether AIM and indeed the stock market in general really is a good place for businesses such as small wine producers where a longer term outlook is such a fundamental requirement.

Stock market investors are notoriously short term in their outlook and have little understanding for the sort of mishaps that can befall small wine producers with a limited offering.

We have been big supporters of Palandri the AIM listed Western Australian wine producer over the past 12 months but have seen its shares drift lower and lower. Palandri's 'innovative' financing structure using Australian Managed Investment Schemes hardly makes it an easy business for a UK investor to understand and it has finally decided to call it a day on AIM and decamp to the Australian market. I for one will miss its unsual financial statements!


Investor's Champion is a registered trade mark of Investors Champion Ltd.  Investor’s Champion Limited is a company registered in England and Wales under number 03577867 whose registered office is at Langwood House, 63-81 High Street, Rickmansworth, Herts WD3 1EQ. Investor’s Champion Ltd is associated with Fundamental Asset Limited who is authorised and regulated by the Financial Services Authority.