Winemaker Australian Vintage Ltd expects the sharp devaluation of the British pound in the wake of the UK's decision to exit the European Union to hurt its annual profit.
Australian Vintage's McGuigan brand was the fourth biggest selling global wine in the UK in the first half of the 2015/16 financial year, and sterling is the foreign currency to which the company is most exposed.
"The recent significant unfavourable movement in the GBP has meant that AVL will need to account for an unforeseen unrealised foreign exchange loss of approximately $1.0 million (after tax) as at 30 June 2016," Australian Vintage said on Tuesday.
"This unrealised loss is based on the exchange rate impact on our UK based working capital."
The UK and European market generated about 45 per cent of Australian Vintage's revenue and profit in the six months to December 31.
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Australian Vintage, whose brands also include Tempus Two and Nepenthe, said in May it expected to report underlying net profit of $7.1 million.
But that was subject to no material change in the exchange rate.
"It is unfortunate that the recent events surrounding the Brexit vote has led to AVL's profit being adversely affected," Australian Vintage chief executive Neil McGuigan said.
"This event was outside of our control and is disappointing as our company was on track to achieve a 10 per cent to 15 per cent profit growth on last year."
Mr McGuigan said the uncertainty in the UK is expected to settle down in the short- to medium-term.
The company said sales of the McGuigan brand are up 22 per cent globally.
Shares in Australian Vintage, which expects to report its annual results on August 24, were four cents, or 7.14 per cent, lower at 52 cents at 1511 AEST.
