Delegat's grape price gripe

Thursday 2nd December 2010

Grape prices are likely to remain near current levels for the next two to three years and further declines in vineyard asset prices are likely, Delegat's Group told shareholders at its annual meeting today.

The company that has positioned its Oyster Bay brand in the super-premium market said its sales performance for the full-year will be ahead of forecast and its half-year operating result is ahead of plan.

The company is forecasting operating net profit after tax of between $23 million and $26 million.

"The group is focused on preserving and enhancing long-term brand equity and growing long-term shareholder value," managing director Jim Delegat told the meeting.

"It will achieve this by maintaining our super-premium brand position and pursuing growth only at acceptable levels of profitability."

In 2010 the group sold 1.95 million cases of wine, up 12% on last year but the average price realisation of $112.70 per case was 10% down on last year.

This decline in price realisation was driven primarily by unfavourable foreign exchange movements and to a lesser extent by changes in sales mix.

A review of markets had identified value growth markets and growth markets.

NZPA

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