Delegat's shares hit record high as profit beats guidance

Winemaker's shares rise to $3.04 and have advanced 26% in the past six months.

BUSINESSDESK: Shares of Delegat’s Group rose 3% to match the record set earlier this month after the winemaker beat its full-year guidance and forecast sales growth to continue in 2013.

Operating profit was $25.6 million in the 12 months ended June 30, up from $23.9 million a year earlier and beating the winemaker’s December guidance. Net profit fell 22% to $25.5 million, mainly reflecting one-time accounting gains a year earlier. Sales slipped 6% to $221.6 million.

Delegat's shares rose to $3.04 and have advanced 26% in the past six months. The stock is rated "outperform" based on the consensus of three analyst recommendations compiled by Reuters.

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

The winemaker said it is on track to achieve sales of 1.9 million cases in the 2013 financial year, up from 1.8 million this year. Its key growth markets for 2013 will be in North America, Australia, New Zealand and the Asia Pacific.

It will continue 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 says.

“The group will continue its strategy of identifying ‘value growth markets’ and ‘growth markets’ which has proven successful and continues to deliver improved profitability, despite currency headwinds.”

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 over-supply of sauvignon blanc grapes since the 2008 harvest. Delegat’s has previously said it expects this to continue for at least another two years.