Delegat agrees to buy 838ha farm for $29.3M, extending footp   6 May 2015

Delegat agrees to buy 838ha farm for $29.3M, extending footprint in Hawkes Bay

By Jonathan Underhill

May 6 (BusinessDesk) - Delegat Group, New Zealand's largest listed wine company, has agreed to buy an 838-hectare farm in the Hawkes Bay for $29.3 million, extending its footprint in the region and lifting production from 2020.

The purchase of the farm in the Crownthorpe region of Hawkes Bay will settle in May 2016 and be funded from existing long-term bank facilities, the Auckland-based company said in a statement. The vendor is Hopkins Farming Group, a Manawatu-based company that owns about 4,700ha of property, comprising 11 dairy farms and four dry-stock farms.

“The Crownthorpe region of Hawkes Bay produces world class Super Premium wine grapes based on its ideal soil types and climate," said Graeme Lord, Delegat managing director. The acquisition "will enable Delegat Group to meet strong growth in global demand for its Super Premium wines including Oyster Bay pinot gris and sparkling wine. Delegat intends to commence planting progressively from spring 2017, enabling incremental sales growth from calendar year 2020 onwards."

He said the land, which is next to an existing Delegat vineyard, has the potential to produce more than 550,000 nine-litre cases of wine a year when fully producing.

At its first-half results in February, Delegat said it was on target to achieve global case sales for the full year of 2.2 million, up 9 percent on last year, and to achieve operating net profit after tax of $34 million, also up 9 percent. It posted a record operating profit of $20.5 million in the first half, although net profit fell 45 percent, mainly caused by a $10.7 million writedown of its vines and grapes and losses on derivative instruments used to limit its foreign currency exposure.

Delegat shares rose 1.9 percent to $4.84 and have gained 21 percent in the past 12 months.

(BusinessDesk)

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