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- 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
