NEW ZEALAND: Delegat's Group reports H1 sales, profits rises

By just-drinks.com editorial team | 25 February 2011

Sales up by 2%
Profits up by 15%
Oversupply continues

Delegat's Group sees improving sales, profits

Delegat's Group has reported increases in net sales and profits in the first half of its fiscal year, but has warned that New Zealand's wine grape glut could last for another three years.

Delegat's said this week that net sales rose by 2% for the six months to the end of December, to NZD131.7m (US$99m). The Oyster Bay wine brand owner reported net profits up by 15% on the same period of the previous year, to NZD15.85m, while operating profits rose by almost 12%, to NZD30m.

Higher prices helped to boost the group's operating performance, with total volume sales down by 1% for the six months.

Delegat's reiterated its warning that an ongoing wine grape glut in New Zealand will likely cause more declines in the value of vineyard assets. Grape prices, meanwhile, are likely to remain at their current levels for the next two or three years, it said.

"Despite these challenges, the group remains confident that its sales performance for the full year will be ahead of forecast," said the company. It expects full-year net profits after tax within analysts' consensus range of NZD20.5m to NZD25.5m.

Last year, Delegat's was forced to acquire full control of its main grape supplier, Oyster Bay Marlborough Vineyards, in order to protect supplies.

Sectors: Company results, Wine

Companies: Delegat’s Group