KEY POINTS:
Wine exporter Delegat's is forecasting double-digit profit growth this year despite the high New Zealand dollar.
Managing director Jim Delegat said net profit was expected to be up more than 10 per cent on last year's $14.9 million, with forecast revenue of about $160 million, up from $133.1
million last year.
"We're managing to still improve our in-market prices but we're losing it on the translations given [the] currency," Delegat said.
He told yesterday's annual meeting the strategy for the company was to lead New Zealand wine category growth and establish Oyster Bay as one of the world's great wine brands.
"This strategy is underpinned by four key success factors: brands, distribution, supply and quality," he said.
"The success of this strategy to date is best evident in the financial performance of the past year and we remain firmly of the view that our continued execution of this strategy positions the company well for long-term financial success."
Shares in Delegat's, which exported 86 per cent of its product, closed flat yesterday at $2.55, compared with an offer price of $1.40 at an initial public offering in April 2006.
The ability to supply had given the company a competitive advantage after investment several years ago in viticulture expansion and the planting of extensive vineyard areas, he said.
"Therefore we can supply greater volumes of wine, which means that we can grow our share at a faster rate than our local competitors."
The company still felt confident of doubling sales every three or four years, he said.
"Looking forward to the 2008 harvest, whilst much has been said about recent adverse weather conditions, I am pleased to report that our vineyards have enjoyed excellent spring growing conditions and are well managed to deliver on expected yields for the 2008 harvest."
Oyster Bay was the leading New Zealand wine brand in Australia and the biggest selling New Zealand wine in Britain and Canada, he said.
"The valuable US market holds significant growth opportunities for Oyster Bay. Already Oyster Bay is the fastest-growing New Zealand wine brand in the US and is recognised for its unique quality, value and brand offering."
Significant investments during the first half of the year included work to secure stockings by major retail chains in the US and sales promotion activity in Britain, Delegat said.
"These investments have been made in the firm belief that they will continue to deliver increased case sales and earnings growth in the current year and beyond."