After a disappointing interim result, Delegat's is warning the market that it will pour similar figures in its full year numbers.
The listed wine company caught many by surprise with its 12% fall in half-year net profit last month, especially after a rea
After a disappointing interim result, Delegat’s is warning the market that it will pour similar figures in its full year numbers.
The listed wine company caught many by surprise with its 12% fall in half-year net profit last month, especially after a reasonably positive annual meeting in December.
At that meeting, it said it expected its annual net profit to be about the same as last year’s $30 million, but later said it would be 30 to 40% down on that after the value of the company’s vineyards took a significant hit from a drop in grape prices.
Delegat’s confirmed yesterday that the drop in its forecasted profit for the 2010 year would be at the higher end of that range, with an expectation that it would be down 38.3% to $18.5 million.
In a presentation at the First NZ Capital Emerging Companies conference yesterday, Jim Delegat revealed that despite the profit drop, the wine company still expected slightly higher revenue coming in.
However, even though it recorded a 10% increase in total sales revenue for the half year to $128.9 million the full year will only be up a measly 0.8% to $218.4 million.
The company has denied it had rose tinted glasses on when it held its annual meeting, pointing out that it was still working through its December half sales at the time and that it wasn’t until January that the company finished negotiations on this season’s grape prices.
Grape prices around the country have fallen after two years of bountiful harvests produced oversupply issues.
With the full result still some months away, the company is giving the market plenty of warning with yesterday’s forecast.
That forecast should help the company avoid a repeat of the sudden drop in share price since the late February result, with the stock (NZX:DGL) down by almost a quarter since then.
