Which are 3 NZX sought-after wine stocks in 2021?

Highlights

• The NZ wine industry has been reeling under pressure of the coronavirus pandemic. 
• Foley Wines saw substantial growth in FY21 despite COVID-19 disruptions.
• Delegat Group expects operating profit between $57 million-$61 million next year.

New Zealand is not just known for its beautiful landscape but is home to some great wines as well. The country exports nearly 90% of its total produce globally to the US, the UK and Australia, with its exports reaching $599 million in Q1 of FY22, up by 9% on previous year. 

The NZ wine industry has been reeling under pressure of the pandemic with the key challenge of managing supply constraints amid rising demand. 

NZ produced 7-8 million fewer cases of Marlborough Sauvignon Blanc in 2021 than a year before with 370K tonnes of grapes harvested in the 2021 vintage, down by 19% from the year 2020’s crop. 

Let’s have a look at how these 3 NZX wine stocks are doing.

 Image source: © 2021 Kalkine Media®, Data source- EODHD/Others

Foley Wines Limited (NZX:FWL) 

Foley witnessed a record operating profit and substantial progress in FY21 despite witnessing disturbances in its key hospitality markets worldwide, unfavourable exchange rates, shipping and supply chain constraints. 

RELATED READ: How is NZ’s wine industry doing amid COVID-19? 

Foley saw a smaller harvest like the rest of the industry amid adverse weather conditions. However, the business has focused on the premiumisation strategy that is helping FPW in creating growth prospects. 

On 24 December, FWL ended the trading session at $1.6.

Delegat Group Limited (NZX:DGL)  

Delegat witnessed a challenging but excellent FY21. Due to the impact of global port congestion, it reported global case sales of 3,178,000 in 2021, down 3% from prior year. However, it reported an increase of 8% in operating NPAT and $74.7 million in solid operational cash flows for the quarter. 

RELATED READ: Which are 2 prominent NZX wine stocks to explore before 2022? 

Delegat hopes to increase sales by 25% to 3,976,000 cases in following three years, with an operating profit of $57 million to $61 million in 2022. 

On 24 December, DGL ended the trading session at $14.2, down 1.39% from its previous close.

Marlborough Wine Estates Group Limited (NZX:MWE) 

MWE recorded a 5% increase in overall sales year-over-year to $6.7 million in FY21, with a 41% rise in branded wine sales to $3.9 million. 

RELATED READ: How are 3 NZX wine stocks doing amid soaring demand? 

The Group's 2021 Vintage (the process of harvesting grapes and creating wine) was, however, 26% lower than the harvest of the 2020 vintage. 

Since July 2021, MWE has reinforced its connections with Foodstuffs and Countdown in NZ, as well as expanding its overseas distribution. 

On 24 December, MWE ended the trading session flat at $0.24. 

Bottom Line 

The NZ wine industry continues to remain impacted by high transport costs, labour shortages, strained supply chains and border controls. 

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)