Lower costs expand Peller’s profits

Article Excerpt

ANDREW PELLER LTD. $8.26 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.9 million; Market cap: $123.1 million; Price-to-sales ratio: 0.5; Dividend yield: 4.0%; SI Rating: Above Average) is Canada’s second-largest wine producer, after Vincor Canada. Peller operates wineries in British Columbia, Ontario and Nova Scotia. It also imports wines from other countries and sells home winemaking kits. In its first quarter, which ended June 30, 2010, Peller’s sales fell 0.8%, to $64.5 million from $65.0 million a year earlier. The company continues to benefit from the launch of new products and steady demand for its premium brands. However, lower export ales and weaker demand for home winemaking kits offset these gains. Peller earned $4.0 million, or $0.28 a share, in the latest quarter. That’s up 21.0% from $3.3 million, or $0.23 a share, in the year-earlier quarter. If you exclude gains on hedging contracts that the company uses to lock in foreign-exchange rates, earnings would have risen by 31.5%. Peller continues…

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