Delegat's profits and sales up

NZPA

Thursday 25th August 2011

Wine company Delegat's Group lifted full year operating net profit 10 percent to $23.9 million, despite challenges posed by the high level of the New Zealand dollar against sterling, the greenback and the euro.

The company said it had successfully increased prices in its key "value growth markets" of Britain and Ireland, to improve profitability while continuing to grow retail distribution.

It also had key "growth markets" of North America, Australia, this country and the Asia Pacific region, where it had focused on increasing sales volumes to realise the potential of its Oyster Bay brands.

In the US and Canada sales volume had grown 27 percent in the year to June to 452,000 cases, and in Australia, New Zealand and Asia Pacific it was up 10 percent to 697,000, although in Britain, Ireland and Europe it was down 14 percent to 820,000.

Total case sales were up 19,000 to 1.97m in the latest year, while sales revenue lifted 5 percent to $229.8m. Reported net profit, taking into account non-cash adjustments, was $32.7m up from $200,000 the year before.

The next two years were expected to be challenging, mainly because of increasingly unfavourable exchange rates and the persistence of the industry's supply imbalance, Delegat's said.

In the current financial year sales volumes were expected to fall to 1.84m cases, as volumes declined in Britain in the first full year since prices were increased in the market. In the 2014 financial year sales of 2.19m cases were forecast as Britain, Ireland and Europe stabilised, while North American, Australasian and Asia Pacific areas continued to grow.

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