Delegat Group, New Zealand's largest listed winemaker, has lifted its operating profit guidance after a record year for case sales.
The Auckland-based winemaker, whose brands include Oyster Bay, is now projecting $38.5 million in net operating profit for the year ended 30 June 2017, from $37 million in 2016. The company has achieved record case sales of 2.656 million cases, it said, ahead of its targeted 9 percent increase in global case sales to 2.632 million cases in the 2017 financial year.
The company previously forecast full-year operating profit to be in line with 2016's record $37 million, based on then-current exchange rates, although it said at the time that forex volatility makes it difficult to forecast financial performance.
Delegat has previously said that the numbers reported under conventional financial reporting standards don't give enough insight into its performance as they don't allow for fair value movements for its vines and grapes. Today the company forecast $2.2 million in positive fair value adjustments for the year, which it expects to result in a reported profit after tax of $40.7 million, from $54 million in 2016.
In the first half, Delegat posted a 17 percent gain in operating profit, which excluded one-time movements in asset valuations, to $24.7 million on a 6 percent gain in operating revenue to $135.8 million. The bulk of Delegat's first-half sales came from its distribution in its New Zealand, Canada, Asia and Pacific segment. Revenue and profit from Europe dropped in the first half, while they rose in the United States. Its full results are due in August.
The shares rose 2.3 percent to $6.65, and have gained 12.1 percent this year.
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