Ann: FLLYR: DGL: DGL - Full Year Results 2012

• Release Date: 29/08/12 10:30
• Summary: FLLYR: DGL: DGL - Full Year Results 2012
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DGL
29/08/2012 08:30
FLLYR

REL: 0830 HRS Delegat's Group Limited

FLLYR: DGL: DGL - Full Year Results 2012

Results for announcement to the market
Reporting Period 12 months to 30 June 2012
Previous Reporting Period 12 months to 30 June 2011

Amount (000s) Percentage change
Revenue from ordinary activities $221,599 (-6%)
Profit from ordinary activities after tax
attributable to shareholders $25,450 (-22%)
Net profit attributable to shareholders $25,450 (-22%)

Audit The financial statements attached to this report have been audited and
are not subject to a qualification. A copy of the audit report applicable to
the full financial statements is attached to this announcement.
Comments Refer to the Full Year Review appended.

Dividends
The Directors have declared a final dividend of 9.0 cents per share. The
dividend will be fully imputed and a supplementary dividend of 1.5882 cents
will be paid to overseas shareholders in accordance with Listing Rule 7.12.7.

Cents per share Imputed Cents per share
Final Dividend for the year ended 30 June 2012
9.0 cents 3.8571 cents

Record date 28 September 2012
Dividend Payment Date 12 October 2012

Net Tangible Assets per share
Current Year Previous corresponding year
Net Tangible Assets per share $1.83 $1.66

DELEGAT'S GROUP LIMITED

Results Announcement - 2012
Delegat's Group Limited (Delegat's) is pleased to present its operating and
financial performance results for the year ended 30 June 2012.
The Group presents its financial statements in accordance with the New
Zealand equivalents to International Financial Reporting Standards (NZ IFRS).
 The Directors continue to be of the view that the results reported under NZ
IFRS do not provide adequate insight into the Group's underlying operational
performance, primarily due to a number of fair value adjustments that are
required to be reported on.

To better understand the operating performance, the Group has published an
Operating Performance report.  This supplementary report eliminates from each
line in the Statement of Financial Performance all fair value adjustments.
Also eliminated are the one-off non-cash accounting adjustments which are
explained further later in this announcement.

Operating Performance
An operating NPAT of $25.6 million was generated compared to $23.9 million
last year.  Operating EBIT of $43.5 million is $0.3 million lower than last
year.  Operating expenses (before NZ IFRS adjustments) at $77.1 million are
$3.2 million lower compared to last year.  'In-market' case price
realisations are being maintained in each of the major markets.

Jim Delegat, Managing Director said: "The Group's strategy of identifying
'Value Growth Markets' and 'Growth Markets' has again proven successful and
delivered improved operating profit performance, increased operating cash
flows and maintained case price realisation in an environment of continued
foreign exchange headwinds and industry supply imbalance".

Delegat's achieved Sales Revenue of $215.1 million on global case sales of
1.850 million in the year.  Sales Revenue was down $14.7 million on last
year, due to global case sales being 6% lower and adverse foreign exchange
rate changes.  This has resulted in case price realisation of $116.30,
compared with $116.70 achieved in 2011, the adverse foreign exchange rate
impacts principally offset by the positive impact of changes in price,
country and product mix.
The key Growth Markets are North America, Australia, New Zealand and Asia
Pacific.  In these markets the Group has focused on growing sales volumes to
realise the potential of the Oyster Bay brand.

The Group's Oyster Bay brand is established as a leading Super-Premium wine
brand in New Zealand, Australia, the United Kingdom and Ireland.  The Oyster
Bay brand continues to gain momentum in the important growth markets of the
United States and Canada, achieving sales growth of 18% to 534,000 cases.

The Group's case sales performance, case price realisation and foreign
currency rates achieved are detailed below:

NZ IFRS Fair Value adjustments
In accordance with NZ IFRS the Group is required to account for certain of
their assets at 'fair value' rather than at historic cost.  All movements in
these fair values are reflected in and impact the Statement of Financial
Performance.  The Group records adjustments in respect of three significant
items at the year-end:
- Biological Assets (Vines) - The Group's vineyards have been revalued at the
reporting date, resulting in a higher value attributable to Biological Assets
of $1.4 million in 2012 (2011: $2.5 million);
- Harvest Provision Release (Grapes) - Inventory is valued at market value,
rather than costs incurred, at harvest.  Any fair value adjustment is
excluded from Operating Performance for the year, by creating a Harvest
Provision.  This Harvest Provision is then released through Cost of Sales
when inventory is sold in subsequent years.  This represents the reversal of
prior periods' fair value adjustments in respect of biological produce as
finished wine is sold in subsequent years. The adjustment provides a net
write-up of $0.1 million for the year (2011: $0.3 million);
- Derivative Instruments held to hedge the Group's foreign currency and
interest rate exposure.  The mark to market movement of these instruments at
balance date resulted in a fair value write-down of $1.5 million (2011: $1.1
million);
In addition the Group makes some minor adjustments in respect of share-based
payments. In aggregate, and after deducting taxation, the impact of fair
value adjustments in the period to 30 June 2012 amounted to a write-down of
$0.1 million.

One-off non-cash accounting adjustments
Last year the Group recorded a number of one-off non-cash accounting
adjustments:
Impairment of assets
Last year, following a reassessment of the land and vineyard improvements
valuation, an impairment charge of $9.9 million recorded in the 2010
financial year was reversed.

Tax adjustments
- Change in Corporate Tax Rate and Removal of Depreciation Deductions - In
the 2010 financial year, following the May 2010 Budget Announcement, certain
changes to tax legislation resulted in non-cash accounting adjustments based
on estimates.  These changes became effective for the Group on 1 July 2011
and therefore the Group was required to review the 2010 estimates for each of
the adjustments at 30 June 2011.  This resulted in a reduction in tax expense
of $0.2 million at 30 June 2011;

- Loss of Continuity - OBMVL tax losses and Prior Period Tax Adjustment -
Last year, Delegat's Wine Estate Limited (Delegat's) purchased the remainder
of shares not already owned in Oyster Bay Marlborough Vineyards Limited
(OBMVL) and as a consequence of the takeover, lost $2.5 million of previously
recognised tax losses leading to a tax expense of $0.8 million. In addition,
the Group was required to expense a deferred tax balance of $0.6 million that
had been carried forward in respect of taxes paid on dividends received by
Delegat's from OBMVL.

Financial Performance
Accounting for all fair value adjustments under NZ IFRS and the non-cash
accounting adjustments, the Group's reported audited financial performance
for the year ended 30 June 2012 is a reported NPAT of $25.5 million.

Cash Flow
The Group generated record Cash Flows from Operations of $49.6 million in the
current year, an increase of $11.0 million on the $38.6 million achieved last
year.  A total of $12.7 million was invested in additional property, plant
and equipment during the year, while $8.1 million was distributed to
shareholders in dividends and $29.0 million of the Group's borrowings were
repaid.

Group Debt
The Group has Net Debt of $91.9 million, compared to $121.3 million in 2011 -
a decrease of 24%.

2012 harvest
As previously announced the 2012 harvest amounted to 20,290 tonnes, a
decrease of 20% on the 2011 vintage.  The 2012 harvest reflects the higher
rainfall and cooler than usual growing season owing to the strong La Nina
weather pattern.
Despite these growing conditions, the season has delivered very good fruit
quality with intense fruit flavours and concentration of varietal characters.

Jim Delegat, says "the Group is managing its inventory levels which will
enable it to achieve sales of 1.950 million cases for the 2013 financial
year".

Dividends
The Directors consider that the underlying operational performance and strong
cash flows support an increase dividend.  Accordingly, the Directors are
pleased to advise they have approved a fully imputed dividend payout of 9.0
cents per share (8.0 cents last year). The dividend will be paid on 12
October 2012 to Shareholders on record at 28 September 2012.

ENDS

For further information please contact:

Jim Delegat
Chief Executive Officer

Delegat's Group Limited
Telephone: +64 9 359 7300
End CA:00226575 For:DGL    Type:FLLYR      Time:2012-08-29 08:30:21