Friday, March 29, 2024

Marlborough vineyards top Delegat to-do list

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Delegat Group is focusing this year’s capital investment on developing Marlborough vineyards, as it pushes to grow global sales by 25% over the next three years.
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The company will also ramp up its marketing programme, targeting more than 500 million customer impressions in its drive to become a super-premium wine company.

Delegat Group is focusing this year’s capital investment on developing Marlborough vineyards, as it pushes to grow global sales by 25% over the next three years.

The winemaker expects to spend $29.7 million on capital investment in the year ending June, down from the $62.2m spent in the June 2021 year, as it plans to grow global case sales by 798,000 to hit 3.98 million in the 2024 year.

“In the coming year, the main focus of capital development is vineyard development, particularly in Marlborough, where we have significant land holdings and are developing vineyards to meet future sales growth and demand. That is the primary focus,” acting managing director Graeme Lord told shareholders at Tuesday’s annual meeting.

“There’s also capital investment in other parts of the business, including winery development and upgrades.”

Executive chair Jim Delegat told shareholders the group planted 192 hectares of new vineyards in the 2021 period and is developing another 245 hectares in the current year. It has a further 649ha of viticultural land that will progressively be planted from the 2023 June year.

Delegat notched up a record operating profit of $65.5m in the 2021 year, but expects to post a more modest result of between $57m and $61m in the current year. That’s due to a smaller harvest and more expensive grapes, supply chain disruptions and higher freight costs and unfavourable currency movements.

The company will also ramp up its marketing programme, targeting more than 500 million customer impressions in its drive to become a super-premium wine company. Half of that will be in the US, where Delegat predicts most of its growth happening in the coming years.

Lord will step back to a non-executive role when Steve Carden joins Delegat from Pāmu in February and, at the same time, Jim Delegat will hand over the chair to independent director Alan Jackson, who was re-elected at Tuesday’s meeting. Jackson has been on the board since 2012, and noted the company’s market value was then a tenth of what it is now.

Rose Delegat was also re-elected to the board, and shareholders overwhelmingly voted in favour of lifting the pool for directors’ fees to $495,000 from $400,000. The Delegat family and directors didn’t vote on the resolution.

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