Delegat in mood to toast year

Delegat Group, New Zealand’s largest listed winemaker, reported a 6 per cent gain in operating profit to a record and expects to achieve at least as much in the 2018 year, subject to foreign-exchange movements.

Operating profit was $38.5 million in the 12 months ended June 30, meeting its July 17 guidance, from $36.2m a year earlier, the Aucklandbased winemaker said. Sales rose 3 per cent to $247.7m. Delegat, whose brands include Oyster Bay, had a record New Zealand harvest in 2017 of 34,595 tonnes, up 4 per cent from a year ago, while its Barossa Valley harvest rose 6 per cent to 2760 tonnes. It is projecting sales growth in each of the next five years, with 2018 case sales forecast to rise to 2.78 million from 2.66 million in 2017 and reach 3.69 million in 2022.

Biggest growth was expected in North America, where it sold 1.1 million cases in 2017 and expected to almost double that in 2022.

UK, Ireland and Europe sales were expected to fall to 680,000 cases in 2018 from 736,000 in 2017 and to be 725,000 in 2022, while sales to Australia, New Zealand and Asia-Pacific were expected to rise to 798,000 cases in 2018 from 785,000 in 2017 and reach 913,000 cases in 2022.

“Based on budget-exchange rates, the group forecasts a 2018 operating profit result at least in line with this year’s record performance,” it said.

Delegat declared a dividend of 13c a share, up from 12c last year. The payment will be made on October 13, with a record date of September 29.

Net profit fell 15 per cent to $40.7m, after an 82 per cent drop in one-time gains in the value of its grapes and derivatives on the year-earlier period.