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 FY24 results, released on 29 August 2024:

FY24 financial summary

• Sales Revenues of $371.8m, up 1% on FY23
• Operating EBIT of 102.7m, up 6% on FY23
• Operating EBITDA of $128.5 million, up 7% on FY23
• Operating NPAT of $59.7 million, up 1% on FY23
• 3.6 million global case sales, down 2% on FY23
• Reported NPAT of $31.4 million, down 52% on FY23

NZX-listed wine maker and exporter, Delegat Group, reported a solid FY24 result, with sales revenues of $371.8m, up 1% on FY23, operating EBITDA of $128.5 million, up 7% on FY23, and Operating NPAT of $59.7 million, up 1% on FY23.

Chair, Jim Delegat, says the results reflect the strength of the Delegat business model and the calibre of its people as they build Delegat into a leading global Super Premium wine company.

“This is a solid result, particularly in the context of current global conditions. Continuing to grow the business and attract more consumers in our key markets is underpinned by the quality of our products, people and brands.”

The Reported NPAT of $31.4 million is down 52% on FY23, primarily driven by the NZ IFRS requirement to value biological assets at their market value, as opposed to their cost to grow. The low yielding 2024 vintage meant the market value of biological assets was lower than their cost to grow, resulting in a write-down adjustment of $5.0 million. This compares to a write-up of $20.9 million in FY23, and results in a year-on-year reduction of reported NPAT of $25.9 million. In addition, tax legislation changes have removed the ability to depreciate commercial buildings for tax purposes. The impact of this change for Delegat resulted in a one-off adjustment to increase deferred tax liabilities as well as the FY24 tax expense by $13.0 million.

“The Board is confident in the Group’s ability to prosper and drive sustainable sales and earnings growth over the long term,” Jim Delegat says.