Kiwi factor halves forecast profit

The strong dollar has been blamed by wine company Delegats for the halving of a prospectus forecast made nine months ago.

It now predicts it will make a June year net profit of $2.58 million compared with its prospectus forecast of $5.15 million when it raised $35 million in capital notes last June.

"The material change there is from the dollar," managing director Jim Delegat said.

The prospectus forecast had been based on the dollar buying 32.5p against its present rate of 32.8p, 0.50 against 0.55 now, 84Ac against 92Ac, 65USc against 71USc and 83Cc against 86Cc.

Delegats exports 82 per cent of its wine, half of that to Britain. The next biggest market is Australia, then Canada and the US.

Delegats foreshadowed the effect of the currency on its profit in its December half-year report.

The company said prices and margins had been maintained in the various markets, but not when converted back to kiwi dollars. - NZPA

Delegating

* Delegat's is New Zealand's fourth-biggest winemaker.
* It is best known for its Oyster Bay range.
* It exports 82pc of its wine, half going to the UK.
* It is planning to float in the second half of this year.