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Australia's Treasury Wine sells some US brands, ups profit guidance

SYDNEY - Australia's Treasury Wine Estates Ltd, the world's largest stand-alone winemaker, said on Monday it would sell 12 U.S. wine brands and raised its annual profit guidance following its purchase of Diageo Plc assets earlier this year.

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Bottles of Penfolds Grange, made by Australian wine maker Penfolds and owned by Australia's Treasury Wine Estates, sit on a shelf for sale at a wine shop in central Sydney, Australia. REUTERS/David Gray/File photo

SYDNEY - Australia's Treasury Wine Estates Ltd, the world's largest stand-alone winemaker, said on Monday it would sell 12 U.S. wine brands and raised its annual profit guidance following its purchase of Diageo Plc assets earlier this year.

The owner of Penfolds and Lindemans labels said in a statement that the "non-core" portfolio of brands comprising about 1 million cases of wine would be sold "at approximately book value", without elaborating.

The sale comes as Melbourne-based Treasury reorganises its U.S. strategy following a disastrous foray into the mass market there, leading to a new focus on more upmarket brands which saw U.S. sales rebound this financial year.

In early trade Treasury shares were up 3.88 percent in a flat Australian market.

"Over the past two years, TWE has been taking deliberate action to manage-down this portfolio of brands," the company said in a statement.

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"The divestment will have nil impact on earnings in F16 and beyond."

A company spokeswoman declined to comment on the sale price or name the buyer.

Treasury Wine also said it expected to deliver earnings before interest and tax of between A$330 million ($246.4 million) and A$340 million in FY16.

It had previously guided for earnings of A$270 million to A$290 million, although that forecast did not include profits from the acquisition of Diageo's assets.

The depreciation of the pound following the Brexit vote would not have a material impact on earnings expectations, it said. 

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