- Release Date: 05/12/13 16:00
- Summary: ADDRESS: DGL: DGL - Chairman's Address to 2013 Annual Meeting
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DGL 05/12/2013 14:00 ADDRESS REL: 1400 HRS Delegat's Group Limited ADDRESS: DGL: DGL - Chairman's Address to 2013 Annual Meeting Each year at the Annual Meeting I have opened my address with words such as 'record' and 'excellent' - today is no exception. I am pleased to again report an excellent result for the year to 30 June 2013, delivered, in line with the guidance provided back in December last year at our 7th Annual Meeting, save for the unscheduled transaction costs associated with our acquisition of Barossa Valley Estate (more on this a little later in the meeting). To avoid any duplication in the presentation and as has been the custom in prior years the future operating plans will be covered by Jim in his address. Slide 5: Financial Highlights (1) Since your Company is a growth story I felt it worthwhile to look at an extract from the 2013 Annual Report showing changes in Financial Highlights over a seven year period between 2007 and 2013. Over this time - Case sales have increased by 709,000 to 1,946,000 cases or 57%. - Sales revenue has increased by $90 million to $222 million or 68% In terms of Operating Performance: - Operating EBITDA has increased by $14.9 million to $56.8 million or 36% and generated an operating NPAT of $26.3 million - a record equalling result with 2012. And in terms of Reported Performance (which incorporates all those accounting fair value adjustments: - EBITDA has increased by $39.6 million to $77.5 million or 104% - Net Profit after Tax has increased by $30.4 million to $41.2 million of 281% - EPS (from which PE is derived) has increased by 30 cps to 40.8 cps or 278% - Total Shareholder's Funds (Net Assets) has increased by $88.4 million to $217.4 million or 69%. Slide 6: Financial Highlights (2) The new record established this year is - Reported Net Profit after Tax of $41.2 million. I have previously commentated that the Statement of Cash Flows is the dominant information source within our suite of Financial Statements. Accordingly the Cash Flows generated from Operating Activities were $39.2 million, compares to $49.6 million in 2012. This reduction largely relating to restocking of inventory to more optimum levels following earlier less than optimum harvest yields. This is followed by significant further investments in vineyard development (including BVE) and winemaking plant saw an increase in investment of some $61 million in the 2012/13 year - some $28.6 million of which relates to the acquisition of BVE All of the above statistics can be regarded as exceptional given the Company's focused growth strategy. Slide 7: Operating Profit Performance In terms of Operating Profit Performance, Operating NPAT of $26.3 million represents a 12% return on Sales Revenue. Given the sales in countries other than New Zealand represent 95% of total sales which when coupled with the on-going strength of the NZ$ is indeed a creditable performance. This generated operating EBIT at $44.6 million covers the Group's finance costs 6.3 times compared with 5.69 times in the 2012 year. The results achieved are testimony to the strength of the Oyster Bay brand and the business model that all segments of the Group relentlessly pursue from the vineyard through winemaking to the market. This business model developed to support the long-term strategic goal of the Group has proven to be both resilient and robust. This business strategy incorporates the four key success factors against which we measure ourselves and indeed measured by the market analysts. Shareholders are well aware of Delegat's strategy to seek out growth and value markets as the primary drivers of quality and sustainable growth - this underlies all the Group's forward planning. The opportunity to acquire the business and operations of Barossa Valley Estate in Australia to augment the Group's existing brands offerings arose in the latter part of the year. Your Board is very confident and indeed excited with this investment and its growth prospects and how it dovetails with the Group's existing and planned varietal offerings. Your Board's priority is to grow Shareholder value. We will continue to seek all opportunities that are wealth accretive to ensure Delegat's sustainable growth continues. Your Board is aware of the progress to the standardisation of reporting required by the Australian Securities and Investment Commission (ASIC) in Australia and the announcements by the Financial Markets Authority in New Zealand to follow the lead. Slide 8: Holding slide Dividend distribution Your Board being cognisant of both dividends to reward shareholders and the need for reinvestment for a growth company, which, with the confidence the Board holds for future revenue streams declared a fully imputed dividend of 10 cents per share this year. This was paid on 11 October 2013 to shareholders on record at 27 September. The Board is confident this dividend is sustainable on the basis of the Company's plan for growth and the ability of management to execute under the plan. Your Board has considered but chosen not to introduce a Dividend Reinvestment Plan at this time. Banking facilities Our relationship with our bankers Westpac is excellent and their ongoing support is testimony to their confidence in the Group to continue to deliver under the business plan. Directors We continue to review our own performance and the composition of the Board with respect to experience and believe there is an appropriate structure and skill base to lead the Company forward. Directors Fees Your Directors are very aware of the ongoing debates on this subject matter. Your Board has considered the level of Directors' Fees which were approved by shareholders back in 2008 and note that the current level of Directors Fees are at the lower end of the scale of Companies of similar size and complexity. No increase is sought but is flagged that a further review will be undertaken prior to the next annual meeting in light of the increased responsibilities and obligations these positions entail. I must note these are the exact same words I used at our last meeting. The Future As I said earlier I am leaving the detail of the future Operating Plans to the Managing Director to provide you the information which gives us, the Board, the confidence in the Group in continuing to grow market share from our internationally acclaimed brands in the increasing number of geographic jurisdictions we are penetrating around the globe. Review Whilst we continue to be subject to all that goes on in the world we also continue to remind ourselves of the increasing value of stakeholder relationship in the broadest sense of the term. Accordingly your Board recognises and thanks you for your participation in the shareholding of the Group whilst at the same time acknowledging the input of suppliers of goods and services, whether they be physical or intellectual, which contributes to the high level of outcome expected in our wine products. Of special note is to acknowledge the high calibre of Delegat's staff domiciled throughout the world - creating a position for the brand that will enable the achievement of "to lead New Zealand category growth and establish Oyster Bay as one of the world's great Super-Premium wind brands". Your Board In closing and just to reiterate, we are part of an uncertain economic world but your Board and all the staff of the Group continue to strive to create shareholder value and continuously seek out wealth accretive opportunities for the benefit of shareholders. I would also take this opportunity to thank each of my fellow board members for their involvement and contributions over the past year. End CA:00244786 For:DGL Type:ADDRESS Time:2013-12-05 14:00:12
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