Delegat Group lifts 1H operating profit 9% to record $26.9 mln
By Rebecca Howard
Feb. 23 (BusinessDesk) - Delegat Group, New Zealand’s largest listed winemaker, lifted operating profit 9 percent in the first half due to the favorable impact of foreign change rate changes and increased in-market pricing and the company is upbeat about the full year.
The Auckland-based company's operating profit lifted 9 percent to a record $26.9 million in the six months to Dec. 31 versus $24.7 million in the prior year. Operating revenue was up 1 percent to $136.9 million while operating earnings before interest and taxation were up 5 percent to $43.4 million. Operating expenses were $36.6 million versus $35.3 million in the same period a year ago.
Operating profit includes the fair value adjustment in respect of grapes when packaged wine is sold rather than on harvest of the grapes, and the fair value adjustment on derivative instruments when the foreign exchange contracts and interest rate swaps are realised. The company said its reported net profit was up 2 percent to $19.4 million.
Global case sales reached 1.38 million, down 5 percent on the year. In North America, strong case sales of 10 percent were achieved. However, in the Australia, New Zealand and Asia Pacific region, case sales declined 6 percent based on a return to more typical levels of promotional activity during November and December, compared to the higher levels experienced in the prior year. In the UK, Ireland and Europe region, case sales declined 20 percent. Higher than normal sales had been achieved in the prior year due to additional promotional activity and customers ordering ahead of price increases.
Operating gross margin, however, lifted 4 percent on the year due to the favorable impact of foreign exchange rates, price increase implemented in the UK and lower cost of sales per case, it said.
Looking ahead, chairman Jim Delegat said the group is on target to achieve global case sales for the full year of 2.78 million, up 5 percent on the prior year. It forecasts a 2018 operating profit result of at least $40.7 million, up 6 percent o the year.
The shares last traded at $7.62 and have gained 25 percent in the past 12 months.