The New Zealand winemaker Waipara Hills Wine Estate has confirmed that it expects to meet its previous forecasts to deliver a return on investment for shareholders early in the 2007-08 financial year, despite what it has called several challenges in the start-up year.

Syd Bradley told shareholders at the annual meeting: "By reducing costs, improving margins, continuing to build long-term business relationships with our contract growers, distributors and importers, we will succeed."

The company achieved operating revenue for the ten months ending 30 June 2002 of $405,520 and the net deficit at $999,048 was $135,369 above prospectus projections.

The company said that by sourcing grapes from contract growers in Marlborough and Canterbury, it had met vintage targets by more than doubling production from 2001 to 192 tonnes in 2002. Bradley said that during the year four contracted vineyards totalling 21 hectares at Waipara were completed and these will begin production in 2004 and 2005. Volumes for 2003 are expected to be around 250 tonnes overall.

"Our major challenge is having the volumes to attract overseas importers," he said, noting that the company's 2002 Sauvignon Blanc has been entirely allocated, and, subject to a successful conclusion to negotiation of an Australian import contract, "almost all of the 2003 is pre-sold."