DGL
27/02/2015 08:56
HALFYR
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REL: 0856 HRS Delegat Group Limited
HALFYR: DGL: DGL 2015 Interim Half Year Results
DELEGAT GROUP LIMITED
Results for announcement to the market
Reporting Period 6 months to 31 December 2014
Previous Reporting Period 6 months to 31 December 2013
Amount (000s) Percentage change
Revenue from ordinary activities $133,839 (+3%)
Operating Profit from ordinary activities after tax (Operating NPAT) $20,511
(+2%)
Operating Profit from ordinary activities before interest, tax and
depreciation (Operating EBITDA) $38,936 (+2%)
Reported profit from ordinary activities after tax attributable to
shareholders (Reported NPAT) $9,778 (-45%)
Net profit attributable to shareholders $9,778 (-45%)
Audit: The financial statements attached to this report have not been
audited.
Comments: Refer to the Executive Chairman's Report appended.
Interim Dividend Cents per share Cents per share (imputed)
Not Applicable Not Applicable
Net Tangible Assets per share
Current Year Previous corresponding year
Net Tangible Assets per share $2.45 (Last Year $2.22)
Executive Chairman's
Interim Report 2015
On behalf of the Board of Directors of Delegat Group Limited, I am pleased to
present its operating and financial results for the six months ended 31
December 2014.
Performance Highlights
-Achieved global case sales of 1,129,000.
-Achieved sales revenue of $125.6 million.
-Record operating NPAT of $20.5 million.
-Delegat Group was awarded 'Best Growth Strategy' at the Deloitte Top-200
Business Awards 2014.
-Oyster Bay received the 'Hot Brand' award from New York's highly regarded
Impact magazine for a fifth consecutive year.
-Barossa Valley Estate Grenache Shiraz Mourvedre 2012 was awarded a Gold
Medal at the Sydney International Wine Competition.
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.
Operating Performance
A record operating NPAT of $20.5 million was generated compared to $20.2
million for the same period the previous year. Operating EBIT of $32.9
million is $0.5 million higher than for the same period in the prior year.
'In-market' case price realisations are being maintained in each of the major
markets.
Delegat achieved Sales Revenue of $125.6 million on global case sales of
1,129,000 in the six month period. Sales Revenue is up $4.4 million on the
same period last year, due to global case sales being 4% higher, which offset
the impact of adverse foreign exchange rate changes. The adverse foreign
exchange rate changes have resulted in case price realisation of $111.3,
compared with the $111.9 achieved last year.
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 half-year reporting date:
- Biological Assets (Vines) - This represents the fair value of grapes that
are growing on the vines before harvest less the associated growing costs.
The net effect is a fair value write-down of $3.1 million (2013: $2.5
million);
-Biological Produce (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 adjustment. 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 write-down of $7.5 million (2013: $4.2 million);
oDerivative 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 $4.3 million (2013: $3.4
million fair value write-up);
These together with minor adjustments in respect of share-based payments, net
of taxation, amount to a write-down of $10.7 million.
Reconciliation of Reporting to Operating Performance
Accounting for all fair value adjustments under NZ IFRS, the Group's reported
unaudited financial performance for the six months ended 31 December 2014 is
reconciled to operating profit as follows:
Cash Flow
The Group generated Cash Flows from Operations of $18.6 million in the
current half-year, which is an increase of $7.1 million on the same period
last year, primarily due to the higher case sales and timing of tax payments.
A total of $34.9 million was invested in additional property, plant and
equipment during the period, including the development of the Marlborough and
Hawke's Bay wineries, and various vineyard development activities in
Marlborough, Hawke's Bay and the Barossa Valley. These significant capital
projects are in line with plan with regards to both cost and completion dates
and will provide earnings growth into the years ahead. The Group distributed
$11.1 million to shareholders in dividends. Additional borrowings of $30.0
million were drawn down to fund the increased capital investment during the
six months.
The Group has Net Debt of $179.4 million, compared to $153.7 million at 30
June 2014 - an increase of 17%.
Looking Forward
The Directors continue to have confidence in the Group's business model and
its ability to deliver sustainable earnings into the future. The Group is on
target to achieve Global case sales for the full year of 2,205,000 up 9% on
last year and achieve full year Operating Net Profit After Tax in line with
market consensus of $34 million up 9% on last year.
JIM DELEGAT
Executive Chairman
For further information please contact
Graeme Lord - Managing Director
DDI (09) 359 7317 or Mobile 021 860 740
End CA:00261249 For:DGL Type:HALFYR Time:2015-02-27 08:56:35