Harvest fall hits Delegat's profit

Chief executive Jim Delegat says the company's Oyster Bay brand is gaining momentum. File photo / Ross Setford

Winemaker Delegat's full-year profit fell 22 per cent after higher rainfall and cooler than usual growing conditions resulted in a lower harvest and drop in sales.

Profit decreased to $25.5 million in the 12 months ended June 30 from $32.7 million a year earlier, the Auckland-based company said.

Sales slipped 6 per cent to $221.6 million. The 2012 harvest fell 20 per cent to 20,290 tonnes. Operating profit of $25.6 million beat its December guidance of earnings of between $20.5 million and $24 million.

The winemaker said it was on track to achieve sales of 1.9 million cases in the 2013 financial year, up from 1.8 million this year.

Delegat's Group said its key growth markets for 2013 would be in North America, Australia, New Zealand and the Asia Pacific.

It would continue to establish Oyster Bay as one of the worlds "super premium" wine brands.

"The Oyster Bay brand continues to gain momentum in the important growth markets of United States and Canada," chief executive Jim Delegat said.

The group would continue a strategy of identifying growth markets, which had proven successful and continued to deliver improved profitability, despite currency headwinds, he said.

The wine industry has suffered from the high New Zealand dollar and duty and tax increases, especially in the United Kingdom.

It has also been hampered by an oversupply of sauvignon blanc grapes since the 2008 harvest. Delegat's has previously said it expected this to continue for at least another two years.

The company's shares closed up 9c yesterday at $3.04.

The stock is rated an average "outperform" based on the consensus of three analyst recommendations compiled by Reuters.

The directors declared a fully-imputed final dividend of 9c per share, payable on October 12, up from 8c last year.