Australia: Lion Nathan posted an increase of 51.9% of net profit in the first half of the year
Lion Nathan, 46 % owned by Kirin Breweries, has reported on May 18 net profit after tax (NPAT) for the 6 months to 31 March 2005 of A$127.6 million – an increase of 51.9 % on those reported for the same period in the prior year. Excluding significant items from the prior year’s result, NPAT was up 8.1 per cent. Operating cash flow was strong – up 32.5 % on the same period last year to A$159.3 million.
In line with the Company’s dividend policy of paying out 70 per cent of core earnings, a fully franked dividend of 15 cents per share was declared – an increase of 7.1 %on the 2004 interim dividend. The dividend record date is 3 June 2005 with payment on 22 June 2005.
The Australian beer business performed well in a competitive market, with volume and value growth in core brands and a mix shift to premium, driving earnings before interest, tax and amortisation (“EBITA”) (before a $5.8 million provision for costs associated with the Two Dogs product recall) up 5.8 per cent to $210.7 million.
In New Zealand, a fall in beer demand and strong price competition, particularly leading up to the key Christmas selling period, contributed to an earnings decline of 8.8 per cent to NZ$46.4 million. Earnings before interest, tax, amortisation and SGARA (“EBITAS”) from the Wines and Spirits business increased to $9.1 million. Corporate costs rose $4.5 million (40.2 per cent) reflecting the impact of one off costs in the half.
Strong operating cash flows ensured that Lion Nathan remained in a sound financial position with gearing (net debt/book value of equity) improving to 44.8 %, and annualised net interest cover increasing to 5.3 times. Debt levels decreased 11.6 % from September 2004 levels to A$1.1 billion mainly due to strong operating cash flow and the receipt of the proceeds from the sale of the China business in early October 2004. There were no major acquisitions or divestments during the period.
The company said: “Despite difficult trading conditions, the Company has delivered a solid first half operating result. While it will be challenging, Lion Nathan believes that, provided there is no material deterioration in the trading environment, it can deliver its current earning guidance of full year NPAT of between A$230 and A$235 million. This is prior to the impact of the one off Two Dogs provision of A$5.8 million and assumes there will be no significant items in the second half of the year.”
HIGHLIGHTS
- Net profit after tax (pre significant items) grew 8.1 per cent to A$127.6 million driven by sound operating performance from Lion Nathan Australia
- Operating cash flow up A$39.1 million (32.5 per cent) to A$159.3 million, underwritten by disciplined working capital management and improved operating earnings
- Lion Nathan Australia delivers EBITA (pre Two Dogs) of A$210.7 million, up 5.8 per cent in a competitive environment
- New Zealand brewing business impacted by sluggish beer market and difficult trading conditions with EBITA down 8.8 per cent to NZ$46.4 million
- The Wines and Spirits Group’s EBITAS increased 3.4 per cent to A$9.1 million with Wither Hills growing strongly
- Financial position strengthened as a result of strong operating cash flow and receipt of China sale proceeds – key measures of gearing and interest cover improved
Shareholders rewarded with increased interim dividend – up 7.1 per cent to 15.0 cps (fully franked)
Înapoi
(libra 1.5234 sec.)