Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Delegat FY profit rises 3% as bigger volumes trump kiwi

Delegat annual profit rises 3% as increases in volumes outweighs higher currency

By Tina Morrison

Aug. 29 (BusinessDesk) - Delegat Group, New Zealand's largest listed wine company, increased annual profit 3 percent as record volumes muted the impact of a stronger local currency.

Profit rose to $42.6 million, or 42.12 cents a share, in the 12 months ended June 30, from $41.2 million, or 40.76 cents, a year earlier, the Auckland-based winemaker said in a statement. Revenue rose 1 percent to $231.8 million as a 4 percent increase in volumes to a record 2.031 million cases of wine was crimped by a higher New Zealand dollar, resulting in the average value per case declining 4 percent to $110, it said.

Excluding the impact of accounting adjustments on the value of its assets, Delegat's annual earnings rose 19 percent to $31.4 million, ahead of the company's forecast of $29 million. That measure includes an adverse foreign exchange impact of $6.3 million, the company said. The valuation of grapes, vines and foreign exchange instruments added a net $11.2 million to earnings in the latest year, compared with a gain of $14.9 million the year earlier, it said.

Delegat is expanding its vineyards and targeting increased exports as it seeks to build a leading global "super premium" wine company with its Oyster Bay and Barossa Valley Estate wine brands. It spent $107 million in capital expenditure the past two years investing in its New Zealand vineyards and buying Barossa Valley Estate in Australia, and plans to outlay a further $86 million in capital expenditure, funded through retained earnings and debt, in the coming year to build a 10,000 tonne capacity Hawkes's Bay winery and new vineyard development in Marlborough, Hawke's Bay and the Barossa Valley.

"Delegat Group is well positioned to pursue its strategic goal to build a leading global Super Premium wine company," executive chairman Jim Delegat said. "The board is confident that the investment in growth will deliver strong returns for shareholders and expects to achieve sales growth of 9 percent to achieve record sales of 2,205,000 cases in the 2015 year."

The North American market became Delegat's largest in the past year, with sales volumes rising 15 percent to 769,000, the company said. Sales to the US are forecast to rise to 888,000 in the coming year and reach 1.43 million by 2019.

"North America is the largest Super Premium wine market in the world and will be the key growth region for the group over the next five years, with strong growth projected to continue in both the United States and Canada," managing director Graeme Lord said. "Achieving this plan will provide in-market distribution scale benefits and sustainable earnings growth."

In the company's second-largest market, which includes Australia, New Zealand, Asia and the Pacific, sale volumes fell 1 percent to 668,000, ahead of the company's 621,000 forecast as sales in Australia were more resilient than expected. Record sales volumes were achieved in Hong Kong and Singapore and distributors were appointed in Japan, Cambodia and Thailand to position the company for future growth. Volumes in the region are forecast to edge up in the coming year to 687,000, reaching 964,000 by 2019, the company forecast.

In the coming year, Delegat will establish an in-market sales operation in China, it said.

Meanwhile, in the UK, Ireland and Europe, sale volumes slipped 2 percent to 594,000 cases, 3 percent ahead of the company's forecast following price increases in the second half of 2013. They are forecast to pick up to 630,000 in the current year and increase to 703,000 by 2019 as it develops new markets in continental Europe, it said. Duty increases imposed by the Irish government during the year are expected to constrain future growth in that market, it said.

The company will pay a dividend of 11 cents a share on Oct. 10. The company's shares rose 0.5 percent to $4.27 and have gained 13 percent so far this year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Economic Update: RBNZ Says Rate Cut Seems Likely

The Reserve Bank will likely cut interest rates further as a persistently strong kiwi dollar makes it difficult for the bank to meet its inflation target, it said. The local currency fell. More>>

ALSO:

House Price Action Plan: RBNZ Signals National Lending Restrictions

The central bank wants to cap bank lending to property investors with a deposit of less than 40 percent at 5 percent and restore the 10 percent limit for owner-occupiers wanting to take out a mortgage with a deposit of less than 20 percent, according to a consultation paper released today. More>>

ALSO:

Sparks Fly: Gordon Campbell On China Steel Dumping Allegations

No doubt, officials on the China desk at MFAT have prided themselves on fashioning a niche position for New Zealand right in between the US and China – and leveraging off both of them! Well, as the Aussies would say, of MFAT: tell ‘em they’re dreaming. More>>

ALSO:

Loan Sharks: Finance Companies Found Guilty Of Breaching Fair Trading Act

Finance companies Budget Loans and Evolution Finance, run by former 1980s corporate high-flyer Allan Hawkins, have been found guilty of 106 charges of breaching the Fair Trading Act for misleading 21 borrowers while enforcing loan contracts. More>>

ALSO:

Post Panama Papers: Govt To Adopt Shewan's Foreign Trust Recommendations

The government will adopt all of the recommendations from former PwC chairman John Shewan to increase disclosure and introduce a register for foreign trusts with new legislation to be introduced next month. More>>

ALSO:

The Price Of Cheese: Cheddar At Eight-Year Low

Food prices decreased 0.5 percent in the year to June 2016, influenced by lower grocery food prices (down 2.3 percent), Statistics New Zealand said today. Compared with June 2015, cheese prices were down 9.5 percent, fresh milk was down 3.9 percent, and yoghurt was down 9.2 percent. More>>

ALSO:

Financial Advisers: New 'Customer-First' Obligations

Goldsmith plans to do away with the current adviser designations which he says have been "unsatisfactory" in that some advisers are obliged to disclose potential conflicts of interest and act in their customers' best interests, but others are not. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news