Costa reported FY21 EBITDA growth of 11%, or 4% excluding acquisitions. The company had lower prices in avocados in 2H21, but berries and mushrooms had a good second-half. There should be strong EBITDA growth in FY22e given acquisitions, tomato production expansion and a recovery for grapes. We forecast FY22e EBITDA of $265 million, up 21%. However, with changes to its lease structure, we only forecast 6% NPAT growth.

Woolworths reported a solid FY21 result with EBIT up 14% to $3,663 million. Second-half EBIT growth was a little stronger with the unwind of COVID-19 costs and better earnings in Big W. While good earnings growth, underneath Woolworths had higher operating cost growth and elevated ongoing capex. Moreover, elevated capex will continue over the next two years in supply chain and IT.

Treasury Wines reported FY21 EBITS of $510 million, with 2H21 EBITS up 45%. While China earnings were down given tariffs, the company successfully reallocated wine to the rest of Asia and this will continue in FY22e. Grape costs have been a headwind for two years. However, price growth was ahead of COGS growth in 2H21 and lower grape costs will boost EBITS from late FY22e onwards. Penfolds contributed 68% to group EBITS in FY21 despite the loss of China.

Coles reported FY21 EBIT of $1,873 million, up 6%. The second-half EBIT was flat. Coles Supermarkets had a much stronger 4Q21 sales result and stabilised market share. While the sales outlook is improving, we note that cost growth was elevated in FY21, and higher costs will be a handbrake on any further margin expansion.