Ticker:  NWC
Website: www.nzwineco.co.nz
CEO: Rob White
Chairman: Mark Peters
Annual meeting date: September 29, 2006

Shares.net.nz comment

The New Zealand Wine Company has recently upgraded its 2007 profit projections to $1,600,000 on the back of an increased grape harvest in 2006, growth in demand in key export markets and favourable exchange rate projections (see chart below).

If the company can grow its profits to this level the shares have room for share price appreciation.
The New Zealand Wine Company's vision is to: “Build premium New Zealand wine brands globally through environmentally sustainable business practices”.

NWC seems to be on the right track to achieving the vision with recent (Jul 2007) success in being voted the best international Sauvignon Blanc at the International Wine challenge in London, as well as winning numerous other awards.

NWC has continued to invest in brand building with the rationale that companies with strong brands and good distribution channels will be best placed to reward their shareholders.
NWC owns or has long-term leases on 172 acres of vineyards with the balance of grapes coming form contract growers off approximately 182 acres.

Capacity has been increased enabling processing of 3,100 tonnes of grapes, with supply estimated to increase to 2,900 tonnes by 2009.

Financial forecast
(Figures in $NZ’000)

05/06 f  05/06 a 06/07 f*

* FX assumptions: USD=0.56, GBP=0.32, AUD=0.83

NWC seems to be a well run company with strong branded labels Grove Mill, Redcliffe and Sanctuary. Companies in this sector generally trade on a p/e of 15-16 which implies a share price of $2.77 - $2.96 if forecasts are met.

Company comments on its latest result

“The recent and future growth in the company's performance starts fairly and squarely with the continued consistency of quality of the company's products," NWC chairman Mark Peters said.
“This is the basis upon which we go forward with confidence of continued improvement in the company results and improved returns to shareholders.”

Latest financial result (full year)

Audited figures for the year to 30 June, 2006
(Released August 2, 2006 – figures in $NZ’000)

Recent milestones

August 2006 Reporting its annual result, NWC says it is continuing to monitor potential merger/acquisition possibilities which it sees as necessary to reach optimal scale as a business. The board is also looking at its options regarding a move from the AX to the main board of the NZX “in due course”.

June 2006 NWC forecasts a lift in net profit for the 06/07 year to $1.6 million. Chief Executive Rob White says that the lift in profit follows an increased grape harvest in 2006, growth in demand in key export markets – especially the United States – and favourable exchange rate projections.

April 2006  NWC announces it has completed a record grape crush of just over 3,000 tonnes from the 2006 harvest. This exceeds the previous record crush from last year by over 800 tonnes. “This places the company in a good position to continue to take advantage of the growing demand for our wine particularly in the United States market,” says CEO Rob White.

Company activities

Established in 1988 as Grove Mill by local Marlborough investors, the NZ Wine Company is a fully integrated wine producing operation, growing grapes and making, bottling, marketing and selling premium quality wines.

The main varietals produced by the company are Sauvignon Blanc, Chardonnay, Riesling, Pinot Gris and Pinot Noir. Under winemaker David Pearce the company's Grove Mill and Sanctuary brands have consistently earned gold medals and five star accolades.
With a vision to build successful premium New Zealand wine brands globally through environmentally sustainable business practices, The NZWC has built on its domestic success exporting throughout the world.