10 Feb 2015

Delegat sales up, profit forecast down

2:49 pm on 10 February 2015

Delegat is expecting its underlying profit will rise due to stronger wine sales.

But the winemaker warned that falls in asset values would hurt its bottom line, which it forecasted would slump 45 percent to $9.8 million, from $17.8 million in the six months to December.

However, Delegat's managing director, Graeme Lord, said that was mainly due to a fall in the value of its derivative instruments, or interest rate swaps.

"It's a non-cash adjustment and equally it could change those same interest rates swaps, if interest rates were to increase," he said.

Mr Lord said sales rose by 4 percent to 1,129,000 cases of wine in the second half of 2014, and he expected full year sales to jump.

Mr Lord said the company was expecting its full year operating net profit will rise by 9 percent to $34 million, which is in line with analysts expectations.