Friday, 24 October 2014

Announcement

MEETING: DGL: DGL - Chairman''s Address to Annual Meeting

04 Dec 2012 13:59NZX
Delegat''s Group Limited (DGL)

Chairman''s Address - Annual Meeting of Shareholders 2012

I am pleased to again report an excellent result for the year to 30 June
2012, delivered in line with the guidance provided back in December last year
at our Annual Meeting. This result was achieved in spite of the on-going
global economic issues which confront us. For the future operating plans I
will leave that for Jim to cover in his Managing Director''s Address.

FINANCIAL HIGHLIGHTS.  (Slide 1)
Each year I have spoken of achieving new records - this year is no exception.
I have previously stated and continue to do so that the Statement of Cash
Flows, as a result of IFRS, is the dominant information source within our
Financial Statements.  Accordingly the Cash Flows from Operating Activities
registered another record at $49.6 million and after further investments in
vineyard development and winemaking plant led to a net reduction in
borrowings of $29.0 million or 24%.

Each of the major statistics can also be regarded as exceptional given the
Company''s growth strategy and the ongoing negative impact of the industry''s
supply imbalance which has led to a significant amount of bulk wine for the
discount market.
The results achieved are testimony to the strength of the Oyster Bay brand
and the business model that all segments of the Group relentlessly pursue.
This business model developed to support the long term strategic goal of the
Group has proven to be both resilient and robust. This business strategy
incorporates the four key success factors against which we measure ourselves
and indeed measured by the market analysts.

I will not dwell on the impacts that valuation issues under IRFS have on
financial statements save to say that they are of themselves ''non cash'' and
hence my wanting to comment only on the results of the main drivers of the
business.

The other financial highlights include the Group successfully improving
profitability on a targeted reduction in case sales resulting in Operating
NPATof $25.6 million,  up 7% on last year.

Your Board were delighted to increase the full year dividend to 9 cents per
share, an increase of 12.5% from the previous year.

Shareholders are well aware of Delegat''s strategy to seek out growth and
value markets as the primary drivers of quality and sustainable growth - this
underlies all the Group''s forward planning. Your share price has increased by
61% since our last meeting and up 17% since June 2012.

Your Board''s priority is to grow Shareholder value. We will continue to seek
all opportunities that are wealth accretive to ensure Delegat''s sustainable
growth continues.

OPERATING PROFIT PERFORMANCE.  (Slide 2)
At our last Annual Meeting we announced plans to increase our selling prices
of our wines in both of the UK and Ireland markets - with the obvious result
which would lead to a reduction in volume by an estimated 30%. Overall for
the Group the total volume variance for the year is 6% - the strategy of
identifying and engaging volume and value markets achieving Group objectives.
Accordingly achieving 1.850 million cases, only 119,000 cases fewer than last
year, is a solid performance.

Operating EBIT (which takes out the IFRS adjustments) at $43.5 million
generated an Operating NPAT of $25.6 million or an equal record (with 2009)
of 12% of Sales Revenue. Given that sales in countries other than New Zealand
represent 95% of total sales which when coupled with the on-going strength of
the NZ$ is indeed a creditable performance. This generated operating EBIT
covers the Groups finance costs 5.69 times.

Your Board is aware of the progress to the standardisation of reporting
required by the Australian Securities and Investment Commission (ASIC) in
Australia and the announcements by the Financial Markets Authority in New
Zealand to follow the lead. Accordingly I refer you to the detailed Notes in
the Financial Statements for a more fulsome explanation of any particular
number.

DIVIDEND DISTRIBUTION.
Your Board being cognisant of both dividends to reward shareholders and the
need for reinvestment for a growth company, which,  with the confidence the
Board holds for future revenue streams declared a fully imputed dividend of 9
cents per share this year - a 12.5% increase on the previous year. This was
paid on 12 October 2012 to shareholders on record at 28 September.
The Board is confident this dividend is sustainable on the basis of the
Company''s plan for growth and the ability of management to execute under the
plan.

BANKING FACILITIES
Our relationship with our bankers Westpac is excellent and although already
reported it is well worth repeating that this year Westpac released its
securities over the assets of the Group supporting the borrowings - such is
their confidence in the Group to continue to deliver under the business plan.

DIRECTORS
Your Board has from time to time received comment in respect to board
composition and ''refreshment'' of the Board has been a focus.  As can be seen
from today''s meeting agenda John Maasland has retired.
I would at this time thank John for his contribution to the Board of
Delegat''s Group since it listed as a public entity in 2004 following the very
successful capital raise of a capital note issue. John who began his
involvement with the Group in 1999 as a Director of our now wholly
amalgamated subsidiary, Oyster Bay Marlborough Vineyards Limited, has had a
significant influence on the Board and particularly as Charman of the Audit
Committee, and I place on record mine and his fellow director''s thanks and
appreciation for his contribution over this time.
Later in the meeting is your opportunity to confirm by vote the appointment
of Alan Jackson to the Board - his Bio having been circulated with the notice
of meeting.
We continue to review our own performance and the composition of the Board
with respect to experience and believe there is an appropriate structure and
skill base to lead the Company forward, while at the same time recognising
market and regulatory changes.

DIRECTORS FEES
Your Directors are very cognisant of the debates that have been held
particularly during the course of this year on this subject matter. Your
Board has considered the level of Directors'' Fees which were approved by
shareholders back in 2008 and note that the current level of Directors Fees
are at the lower end of the scale of Companies of similar size and
complexity. No increase is sought but is flagged that a further review will
be undertaken prior to the next annual meeting in light of the increased
responsibilities and obligations these positions entail.

THE FUTURE
As I said earlier I am leaving the detail of the Operating Plans to the
Managing Director to provide you the information which gives us the
confidence as a Board in the Group in continuing to grow market share from
our internationally acclaimed brands in the increasing number of geographic
jurisdictions we are penetrating around the globe.

REVIEW
Whilst we continue to be subject to all that goes on in the world we also
continue to remind ourselves of the increasing value of stakeholder
relationship in the broadest sense of the term. Accordingly your Board
recognises and thanks you for your participation in the shareholding of the
Group whilst at the same time acknowledging the input of suppliers of goods
and services, whether they be physical or intellectual, which contributes to
the high level of outcome expected in our wine products. Of special note is
to acknowledge the high calibre of Delegat''s staff domiciled throughout the
world - creating a position for the brand that will enable the achievement of
"to lead New Zealand category growth and establish Oyster Bay as one of the
world''s great Super-Premium wind brands".

YOUR BOARD
In closing and just to reiterate, we are part of an uncertain economic world
but your Board and all the staff of the Group continue to strive to create
shareholder value and continuously seek out wealth accretive opportunities
for the benefit of shareholders and to thank each of my fellow board members
for their involvement and contributions.

ENDS
For further information please contact
Robert Wilton
Chairman
Delegat''s Group Limited
Telephone 64 9 359 7300
End CA:00230652 For:DGL    Type:MEETING    Time:2012-12-04 13:59:54
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Delegat's Group Limited Ordinary Shares
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