Delegat posts 24% decline in annual earnings on writedowns

Thursday 27th August 2015

Delegat Group, New Zealand's largest listed wine company, posted a 24 percent decline in annual profit as it wrote down the value of its grapes and financial instruments used to limit its foreign currency and interest rate exposure.

Net profit fell to $32.5 million, or 32.16 cents per share, in the year ended June 30, from $42.6 million, or 42.12 cents, a year earlier, the Auckland based company said in a statement. Excluding the writedowns, operating net profit after tax increased 10 percent to $34.4 million, ahead of the company's $34 million forecast.

Delegat met its target to increase global wine case sales by 9 percent to 2.21 million in the 2015 financial year, and expects to increase sales a further 8 percent to 2.379 million cases in 2016, in line with its plan to sell 3.17 million cases by 2020. Its net debt rose 31 percent to $202 million as it invested $78.9 million in additional property, plant and equipment, including vineyard development in New Zealand, extending its Marlborough winery and starting construction of its Hawke's Bay winery, as well as in the Barossa Valley in Australia. It plans to invest a further $101.9 million in 2016 to provide earnings growth in future years.

"The group in investing for growth to support its strategic goal to build a leading global 'super premium' wine company," said executive chairman Jim Delegat.

The winemaker will pay an 11 cent final dividend on Oct. 9, unchanged from the year earlier.

Delegat shares last traded at $5.25 and have gained 14 percent so far this year.

BusinessDesk.co.nz

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