Delegat's doubles profit, beats forecasts

Wine company Delegat's Group today reported its maiden June year net profit since listing had doubled from 2005 to $5.20 million and it had beaten key prospectus forecasts.

Managing director Jim Delegat said the company had achieved, with a margin, all key financial measures contained in its March prospectus.

Revenue rose 47 per cent to $85.38m and the pre-tax operating surplus rose 128 per cent to $8.06m. The provision for tax rose 200 per cent to $2.84m.

Earnings per share rose to 7.02c from 3.81.

A 1.6cps dividend will be paid on October 26.

The net profit was 19.5 per cent ahead of the prospectus forecast. The prospectus projected operating revenue would rise from $58m in 2005, to $80.8m, and $122.5m in 2007.

Shares in Delegat's, which was involved in a protracted but ultimately victorious battle for control of Oyster Bay Marlborough Vineyards, were issued at $1.40 in March and were up 10c to $2.25 today. That saw its market capitalisation rise to $225m.

Shares closed up 18c today at $2.33.

Ebitda (earnings before interest, tax, depreciation and amortisation) came in at $20.9m, 8.3 per cent higher than projected.

Mr Delegat said the company experienced continued strong demand in all major markets. It had to re-allocate inventory to meet that and, as a result, exceeded case sales projections and price expectations.

"The resulting increased revenues and superior margin generation, assisted by improved foreign exchange rates toward the end of the financial year, has produced a higher than projected ebitda," Mr Delegat said.

The 809,000 cases sold was 39 per cent up on last year and the price of $105 per case compared with the projection of $100.

Delegat's share of total New Zealand wine exports rose to 10.3 per cent with 10.4 per cent of sauvignon blanc exports, 26.6 per cent of chardonnay, 40.7 per cent of merlot and 5.6 per cent of pinot noir.

Its exports rose 42 per cent to 84 per cent of its total output.

The company crushed 17,600 tonnes of grapes from Marlborough and Hawke's Bay in the current year, significantly ahead of the 2005/6 vintage.

Expansion and investment of its winery would result in significant costs savings, Mr Delegat said.

Delegat's was established by Nikola and Vidosava Delegat in 1947. The family and associates retained a 68 per cent stake in the company.

- NZPA