Delegat Group Limited Analysis

Overview

Delegat Group is a global wine industry success story. Delegat has achieved 22-fold growth since 2002 and is now the number one exporter of New Zealand wine to the world. The company has established Oyster Bay as a leading global Super Premium wine brand and owns Barossa Valley Estate in Australia. Delegat’s global team of 450 work hard to achieve the extraordinary and excel on four key success factors; world famous brands, global distribution, super premium quality and exclusive vineyard supply.

Performance

The following information was extracted from Delegat Group Limited's interim results, released on 28 February 2025:

HY25 Financial summary

• Global Case Sales of 1,634,000 Down 290,000 cases on HY24 (-15%)
• Operating EBITDA of $61.6 million Down $13.2 million on HY24 (-18%)
• Operating NPAT of $28.3 million Down $9.5 million on HY24 (-25%)
• Reported NPAT of $12.5 million Down $20.9 million on HY24 (-63%)
• Cash from operations of $75.6 million Up $39.8 million on HY24 (+111%)

An Operating NPAT of $28.3 million was generated compared to $37.8 million for the same period in the previous year. Operating EBIT of $48.4 million is $13.6 million lower than the same period last year. Delegat achieved Operating Revenue of $178.6 million on global case sales of 1,634,000 in the six month period. As a result, revenue is down $20.0 million on the same period last year. This is primarily due to the impact of a 15% decrease in global case sales, offset by a favourable foreign exchange movement. Operating Gross Profit is down 10% on the same period last year. The Group’s case sales performance and foreign currency rates achieved are detailed in table 2. Operating expenses (before NZ IFRS adjustments) at $37.9 million are $3.8 million higher compared to the same period in the previous year. This is due to increased investment in consumer advertising and brand marketing. This decrease in operating net profit after tax for the six month period was expected following the lower yielding 2024 vintage, challenging consumer market and inventory dynamics, along with the planned price increases in certain markets impacting on case sales volumes in the short term.