KEY POINTS:
The New Zealand Wine Company is blaming the strength of this country's currency for a fall in profit despite rising revenues.
The Marlborough-based company said today its audited net tax paid surplus for the June year was $961,000, 6.3 per cent down from the $1.03 million the year
before.
That was on total revenue up 13.8 per cent to $10.72 million, from $9.4 million.
Chairman Mark Peters said the unexpectedly strong, and continually increasing, value of the NZ dollar throughout the past financial year had turned what would have been a record result into an average year for earnings.
"A pleasing aspect of the year is that sales volumes were right on target with the growth strategy implemented by the company in recent years," Mr Peters said.
The final dividend of 4 cents per share fully imputed would be paid to shareholders in September.
Mr Peters, who is retiring after 15 years as chairman, said a factor in the company's sales growth was the formal accreditation of CarboNZero status for the winery in 2006.
The move gained worldwide publicity at a time when the issues of global climate change and food miles had become real at an international level, he said.
Chief executive Rob White said the benefits of the company's various environmental programmes were significant.
As well as media coverage, in bringing down its carbon emissions the company was also bringing down costs.
"The most dramatic example is with electricity usage where in completing the 2007 vintage we used less electricity than in 2006 despite processing an additional 600 tonnes," Mr White said.
"The response from our customers particularly in the UK has been immediate and has seen us secure listings in Tesco and a major housebrand contract with Sainsburys."
The company was in a good position to weather the current adverse external factors, he said.
It was in a healthy financial position and was well placed to take advantage of a predicted return to long term average foreign exchange rates.
But Mr White was concerned by the high price of contract fruit, which he said was at odds with the lower export returns the industry faced, and which had been compounded by relatively low yields and frosts from 2007.
While quality was good and overall volumes were sufficient to meet the company's demand the grape input cost remained high, he said.
The whole industry needed to face the challenges of a high NZ dollar, over-valued land and grape prices and the introduction of new accounting standards.
NZ Wine Co shares last traded yesterday at $2.50, having ranged between $2 and $2.55 in the past year.
- NZPA
