Wine company reports 7.2% increase in profit

By NZPA

Monday 29th January 2007

New Zealand Wine Company Ltd has posted a 7.2% increase in first-half profit but the wine exporter said the high New Zealand dollar will prevent it from achieving its full-year forecast.

The NZAX-listed company, which counts Grove Mill, Sanctuary, Redcliffe and Frog Haven wine among its brands, reported an after tax surplus of $462,000 in the six months ended December 31.

The result was achieved on a 6.9% increase in revenue to $4.9 million. A fully imputed interim dividend of 3 cents per share was declared, unchanged from last year, and payable on April 2.

Chairman Mark Peters said the company was investing in building brands and the second half of the year would be better than the first half.

But he said the final result for the year would depend very much upon the level of the dollar between now and June 30.

"The stubborn strength of the dollar has been well astray from bank forecasts of 56 cents against the US dollar used in June 2006 for our projection for 2007 of a net result of $1.6 million and this certainly will not be reached," Peters said.

But sales were meeting budgeted levels and that was positive for the full-year result.

"Once the currency does see lower levels the company is well placed to benefit accordingly."

All of the 2006 wines released to date have been well received in the market place.

The company is anticipating at quality harvest for the 2007 vintage notwithstanding the impact of mixed summer weather.

"The final dividend for the year will be set once the final result is known and may be reasonably expected to be higher than in 2006," Peters said.

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