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Ann: HALFYR: DGL: DGL 2015 Interim Half Year Results

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    • Release Date: 27/02/15 08:56
    • Summary: HALFYR: DGL: DGL 2015 Interim Half Year Results
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    					DGL
    27/02/2015 08:56
    HALFYR
    PRICE SENSITIVE
    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
    				
 
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