DGL - Delegats Wines

[Ferg]

Delegat Wines released their HY result today:
https://www.nzx.com/announcements/468314
https://www.nzx.com/announcements/468312

I just listened to their investor presentation.  Very happy holder.

The highlights:
 ~ Volumes up 3%
 ~ Sales value at $179.6m for the HY was up 1% on last year
 ~ Sales value was impacted by a combination of competitive pricing action and the USA tariffs
 ~ Operating Gross Profit was 49% of sales, up on last HY of 48% which was helped by the bumper harvest in 2025 {for context FY25 GM was 45.3%}
 ~ Operating NPAT at $29.7m was up on last year's $28.3m
 ~ We are yet to see the impact of reversing the massive harvest provision in 2024 (which impacts reported NPAT, but is irrelevant for operating NPAT)

Full year guidance for operating profit of $50-$55m was re-affirmed.  Given the modest movement in sales away from H1 into H2 due to USA tariff disruptions and the timing of deliveries into the USA, Delegat Wines should deliver on forecast case sales of 3.3m or thereabouts.  Assuming margins and cost savings are maintained, I see Delegat Wines landing at the upper end of that guidance operating NPAT for FY26

$50m operating NPAT will be 49.4c EPS
$55m operating NPAT will be 54.4c SPS
Midpoint of 51.9c puts DGL on a forward P/E ratio of 8.2.

What is pleasing to see is the growth in local sales for NZ & Oz, plus large gains in China as well as the UK & Ireland.  Gains in sales here have offset the decline in USA sales....the market there is still in a state of flux but still remains a priority and focus for DGL.  Interestingly Canada is a big opportunity for DGL given changes to local licencing laws and the collapse of USA wines being imported into Canada.  What is working for Delegat Wines is the premiumisation strategy and their relationship with buyers in the local markets....the super premium category continues to see strength relative to other wine segments and Oyster Bay is a strong brand in that category.