30 Aug 2012

North America sales push up Delegats profit

10:43 am on 30 August 2012

Delegats has posted a rise in its full year profit as it continues to make in-roads into the lucrative North American market.

The listed winemaking company's profit rose 7% to $25.6 million in the year to June compared with the previous year. However, sales fell 6% to $251 million.

Delegats managing director Jim Delegat says the company has been hit by adverse exchange rates, but this has been offset by higher prices for its Oyster Bay brand, and selling more in markets like North America.

Mr Delegat says the US and Canada experienced an 18% increase in sales. He expects sales to increase in the coming year.

He says the company's sales in the US and Canada increased by 18%, or 534,000 cases.

"The long term opportunities there are really the makings of the company," Mr Delegat says. "We have for the last four years established a significant in market sales team presence, we have 50 employees there".

He sees the company's wine market in North America and Canada doubling in the next few years.

Mr Delegat says the 2012 harvest dropped a fifth to 20,290 tonnes due to higher rainfall and a cooler than usual growing season and the glut which plagued the sauvignon blanc grape market has corrected itself.

The company will focus on the Chinese market in the long-term, and Mr Delegat thinks it will make a significant contribution to its operations in the next five to 10 years.

The company will pay a dividend of 9 cents a share.