Delegat Group Posts Record Operating NPAT as Dividend Rises 10%

Strong Operating Earnings Offset by Non-Cash Charges

Delegat Group Limited (NZX:DGL) delivered a robust FY26 operating performance, with Operating Net Profit After Tax (NPAT) climbing 20% to NZD 61.5 million, underpinned by a record Operating EBITDA of NZD 134.5 million. This growth came alongside a 4% increase in global case sales to 3.32 million, reflecting steady demand for the Group’s premium wine portfolio, notably Oyster Bay.

However, reported NPAT fell 19% to NZD 39.5 million, weighed down by NZ IFRS fair value adjustments including a NZD 15 million write-down on biological produce (grapes) and a NZD 8.7 million non-cash impairment of Barossa Valley Estate assets. These accounting entries, while significant, do not impact cash flow or the Group’s liquidity.

Dividend Raised as Cash Flow and Balance Sheet Strengthen

Reflecting confidence in the Group’s underlying performance and financial position, the Board declared a fully imputed final dividend of 22 cents per share, a 10% increase over the past five years. This dividend will be paid on 9 October 2026 to shareholders on record as of 25 September 2026.

Cash from operations reached a record NZD 110.5 million, enabling net debt to be cut by NZD 51.8 million to NZD 276.8 million. The Group maintains access to a NZD 427 million syndicated senior debt facility with ample covenant headroom, positioning it well for ongoing investment and growth.

Geographic and Market Diversification Drive Sales Growth

Delegat’s sales remain well diversified by region: North America accounted for 47% of case sales, growing 3% to 1.55 million cases; the UK, Ireland, and Europe contributed 31%, up 2%; and Australia, New Zealand, China, and Asia Pacific made up 22%, with a strong 10% rise. The Group’s in-market sales teams and distribution networks continue to underpin growth and resilience amid shifting global market conditions.

The 2026 harvest yielded exceptional quality fruit across Marlborough, Hawke's Bay, and Barossa Valley, though tonnage was deliberately reduced by 19% to align inventory with sales plans. This strategy supports the Group’s premium positioning and inventory management.

Investing for Sustainable Growth and Premiumisation

Delegat has invested over NZD 240 million in strategic growth assets over the past five years, including vineyards and winery expansions in key regions. The Board has approved a further NZD 33.7 million of capital expenditure for FY27, signalling ongoing commitment to enhancing production capacity and brand strength.

The Group’s sustainability initiatives remain integral, with accreditation under Sustainable Winegrowing New Zealand and Australia, and ongoing efforts to reduce environmental impact and improve workplace safety.

Outlook: Targeting 5% Case Sales Growth and Higher Operating NPAT

Looking ahead, Delegat plans to grow global case sales by 5% over the next three years, aiming for 3.6 million cases by FY29. The primary driver is expected to be Oyster Bay sales in North America, alongside efforts to improve case price realisation and profit margins across markets.

For FY27, the Group forecasts global case sales of 3.4 million and Operating NPAT in the range of NZD 62 million to 66 million, excluding any potential US tariff refunds, which remain a contingent asset with uncertain timing and amount.

While the non-cash impairment of Barossa Valley Estate assets reflects a cautious reassessment of premium Australian red wine market conditions, the Board emphasises that this does not affect cash flow or investment plans, underscoring confidence in the Group’s core business and long-term strategy.

Delegat’s ability to navigate tariff changes, currency fluctuations, and evolving consumer preferences will be critical as it pursues sustainable growth in a competitive global wine market.