KEY POINTS:
The Winemaker who declared last year he'd always be a Westie at heart - even though he lives in Remuera - strikes a nice balance between his West Auckland roots and his blue-chip, multimillionaire status.
There don't appear to be any affected airs and graces about 58-year-old Jim Delegat, the managing director of NZX-listed Delegat's, exporter of the Oyster Bay brand.
But the polished salesman - the New Zealand-born son of Croatian migrants - is clearly very proud of his company, which he and his sister Rose each have a 33 per cent stake in.
When it listed in April, Delegat and his shareholding family members said they would cancel up to $22 million worth of their own shares to boost the position of new shareholders if the company missed its prospectus projections.
It was a bold offer, but one that never looked likely to be required.
Those shares, which listed at $1.40, are now trading at $2.40, meaning the Delegat siblings are sitting on a paper profit of about $67 million since listing, or a 70 per cent gain. Shares have gone as high as $2.83 since the float.
As Rose Delegat said when the shares were listed last year: that's pretty good for a "couple of kids from West Auckland".
Or, as Jim Delegat puts it: "I think it's important that you follow your dreams - and, if you feel comfortable with what you're doing and you're prepared to work hard, you can achieve your stated ambitions."
Yesterday, Delegat's officially opened its $73 million winery in Marlborough's Wairau Valley, which last year's $45 million float helped to fund. It's the biggest investment of its type in this country.
Last year Jim and Rose Delegat were named "wine persons" of 2006 by the wine industry's official body, New Zealand Winegrower.
Of the company's successes over the past decade, Delegat says: "It's based really on the ability to think strategically, plan in advance and really work hard for results."
Last week's half-year results show the company is on track for full-year profits of $13.8 million - good news for the Delegats and fellow shareholder and chairman Bob Wilton.
The three of them offered the $22 million sweetener to encourage investor participation at a time when the market was "moribund" and sceptical of the projected growth story Delegat's was trying to tell, Delegat says. The company needed the float proceeds to fully realise its ambitions.
"What we had to do was really put our money on the line to say that this is what we're doing," he says.
"And we did think long and hard about that."
But, honestly, was it a relief to see profit tracking towards target for this year, or had he always felt they were going to get there? Were there any nervous moments with $22 million at stake?
"We set ourselves some challenging targets so the success hasn't come without hard work. But we have always remained confident of achieving those targets."
The recent strengthening in the dollar means getting across the line "will really have to be based on a true trading performance".
But the acquisition of new major customers and distributors is underpinning confidence they'll get there.
"We are significantly increasing our global distribution network with stand-out leading retailers such as your Tescos, your Bonds, your Wholefoods [in the US] and people like that."
So what was it about Delegat's that helped it get its foot in the door overseas to sell the New Zealand wine story?
"We always highlight the consumer trends which are underpinning the growth of New Zealand [wines]."
The argument that baby boomers, those with high disposable incomes and other discerning consumers in Western countries are seeking out "the best the world has got to offer" is part of the pitch.
Once retailers and distributors accepted that idea, Delegat's negotiated terms around a "rigorous" annual business plan that included a commitment to supply in volume and Delegat's investment in developing the market.
"So we positioned ourselves as a New Zealand category leader with the ability to supply and invest in retail sales promotion. And powerful retailers see value in that."
Oyster Bay's reputation globally is another key plank in Delegat's success as it "resonates" with consumers who have high disposable income, Delegat says.
"It's a brand that typifies the best of New Zealand's offering.
"Oyster Bay is an aspirer's brand and it appeals to those kinds ofpeople who can afford to havewines as an everyday affordable luxury.
"There's a new dynamic in consumer spending where people are prepared to spend more and pay a premium for products that are important to their lifestyle."
Another element in the company's success is the establishment of in-market sales teams in the United States, Britain, Canada and Australia. On Delegat's vision for the future, Delegat says the main focus for the next few years is to perform according to target. The firm, which produces about 1.2 million cases a year now, is aiming for 2.5 million by 2010.
Asked if the doubling of production will translate into a comparable doubling of profit, Delegat indicates the maths won't be that simple. "Improved revenue growth will be gained through product mix, country mix and improved in-market price realisation."
About 85 per cent of the product is sold overseas and Delegat says the company is on track to achieve more than $100 million of exports this year.
He's confident New Zealand's focus on the premium end of the export market will help to shield it from any global oversupply blips.
Delegat also sees further "great" potential in sparkling wines and pinot gris.
But he's wary of any repeat of the Wither Hills "debacle", saying producers need to be extra cautious about which wines they enter for star ratings or awards. The feedback from overseas buyers is that the controversy won't have an ongoing effect on New Zealand's reputation but they say "we wouldn't want this to occur too frequently", Delegat says.
One of the ironies of the high-quality winemaking success of West Aucklanders from the former Yugoslavia - or their descendants - is that their product used to be disparagingly called "Dally plonk", a reference to Dalmatia in Croatia.
The Delegats' parents established their winery at Henderson after meeting and marrying following their arrival from Croatia, where they had been involved in mixed farming and viticulture.
Delegat agrees some of the early wine from West Auckland generally was not up to much and says his and Rose's more recent success has involved adaptation.
"Rose and I have got an inherited talent and we enjoy the business. We feel we know a lot about it and we're comfortable in it. We've had the ability to change with the times."
JIM DELEGAT
Age: 58.
Family: Married to Kate, two sons.
Lives: Remuera.
Educated: Kelston Boys High.
Job: Managing director of winemaker Delegat's Group.
Key brands: Oyster Bay, Delegat's.
