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Delegat's says 2014 harvest supports sales growth projections

Delegat's Group [NZX: DGL], the winemaker which last year bought Australia's Barossa Valley Estate, said its just completed 2014 harvest will allow it to achieve its forecast future sales growth.

The Auckland-based winemaker expects to increase wine sale volumes by 2 percent to 1.985 million cases in the year ending June 30, accelerating to an 8.8 percent pace in 2015 and 8.9 percent in 2016, according to projections detailed in its 2013 annual report. The 2014 harvest amounted to 35,127 tonnes, as its New Zealand vintage increased 18 percent to 34,123 tonnes. Its Australian harvest, the first vintage since acquisition of Barossa in June last year, amounted to 1,004 tonnes, the company said today.

"The 2014 vintage has delivered excellent quality in all regions," managing director Graeme Lord said. "The group has appropriate inventories to achieve future sales growth in line with guidance provided in the 2013 annual report."

Delegat's is embarking on a plan to boost global sales to 3.07 million cases of wine of the next six years, establishing its Oyster Bay and Barossa Valley Estate varieties as super-premium brands, as it targets the North American market. To support that growth, Delegat’s plans to spend $132 million in capital expenditure over three years, including the construction of a 10,000 tonne capacity winery in Hawke’s Bay and expanding its Marlborough winery and vineyard development. It expects to fund the investment by retaining earnings and using debt.

The company's shares last traded at $4 and have increased 6.7 percent so far this year.

(BusinessDesk)