By Ian Neubauer

Foster’s Group posted its lowest full-year result on record yesterday (August 26) after slashing more than $700 million of the value of its domestic and US wine assets earlier this year.

The multi-beverage company delivered $111.7 million net profit for the 2007-08 fiscal year — down 88 per cent compared to the year before. It included an after tax writedown of $602.9 million attributed to an overzealous foray into the global wine industry.    

Foster’s has been in a state of flux since it announced the writedown in June that saw the launch of a strategic review and the shock resignation of former CEO, Trevor O’Hoy,

Acting CEO Ian Johnston said Foster’s would decline to issue a profit forecast for 2009 until the review wraps up later this year. He sought to reassure shareholders the company was in good stead at a meeting in Melbourne yesterday, saying it had significant liquidity and strong performance in beer.

Foster’s net beer sales rose 5.8 per cent over the period, driven by a shift toward higher-margin premium beers and a reverse in the long-running sales decline of its hero product VB.

Johnston also said the company was making progress in the search for a new CEO but did not elaborate.

Foster’s shares spiked following the posting of the full year result, climbing yesterday from $5.33 to $5.41. The shares were trading at $5.58 at 3:00pm today (August 27).

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The Shout Team

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