The listed wine company previously known as McGuigan Simeon, expects sales volumes to rise 10 per cent in the full year and more than 7 per cent in dollar terms.

Despite recent industry figures pointing to a large drop in Australian wine sales to Britain - the country's biggest market by volume - Australian Vintage said its McGuigan brand had expanded 32 per cent in the bottleshop and in supermarkets.

The chief executive, Dane Hudson, said the group was committed to higher profits in 2009-10, following a $120million impairment booked to its business this year, but it could not indicate at this stage the size of the expected surplus.

"We are going to make a small operating profit [this year] excluding the significant provision we took, but I think in the current conditions that is not a bad outcome."

Australian Vintage will publish its full-year result on August 26.

The company, which owns labels such as McGuigan, Miranda and Yaldara, made a small profit last year after spending two years bogged down in losses due to heavy write-downs on its wine inventory, an appreciating dollar and a wine glut that crushed prices.

Shares in the group have followed the poor sentiment for the whole wine sector.

Australian Vintage's share price halved between 2006 and 2008 and is now drifting towards penny-dreadful territory at 13.5c.

The stock has fallen nearly 90 per cent in the past 12 months, and a sharp decline since June 1 prompted a "please explain" from the Australian Securities Exchange yesterday.

Australian Vintage said in response it knew of no reason for the deteriorating share price, but as part of its trading update - coincidentally made public on the same day - it said it had experienced bumper sales.

Mr Hudson said the grape harvest finished last month and the company had processed 163,000 tonnes, 11 per cent less than last year's 183,000 tonnes.

He said the sales increase would be driven mainly by exports.

"This is a strong result when you consider that the value of total Australian wine exports has declined over the last 12 months by around 14 per cent."

Data collected by the Australian Wine and Brandy Corporation reveals that for the year to the end of last month the volume of wine exports rose 1 per cent to 733 million litres.

However, value fell 14 per cent, to $2.4 billion, on an average price fall of 15 per cent to $3.27 a litre.