Australian Vintage has posted a net profit of $7.1m for the full year ended 30 June 2012, up by 8%, compared to the net profit earned during the prior year period.

Sales for the reporting period were up by 2.1% to $228m, compared to the sales during same period the previous year.

The increase in sales was primarily due to strong performance in UK/Europe.

Australian Vintage chief executive Neil McGuigan said cash flow from operating activities was up $9.3m to $10.6m primarily due to reduced bulk wine purchases during the year.

"Net debt is down to $129.1m, compared to $161m as at June 2011 as a result of the sale of Loxton Winery in August 2011 to TWG Australia II Pty Ltd," McGuigan added.

"Our strengthened capital management position follows asset sales and costs reduction programs over the past few years and builds on our mission statement of making quality wines and building brands that our customers know and love.

"It is expected that the total Australian industry yield from this year’s vintage will be around 1.66 million tonnes which is higher than previous years despite some regions reporting lower yields.

"Overall, production is in line with sales but we see some danger signs for oversupply if higher yielding vintages continue."