By Ian Neubauer
Lion Nathan went from strength to strength this week following Wednesday’s (Apr 22) announcement that it has been targetted for takeover by its majority shareholder Kirin Holdings and the release today (Apr 24) of better than expected financial results for the six months ended March 31.
Lion’s net profits were up 6.9 per cent for the period, with the brewer attributing the positive result to a robust business model, secure funding position, core brand growth innovation, tap gains and growth of its recently acquired Boag’s brand.
The brewer also performed well in New Zealand on the back of growth of Steinlager Pure and Speight’s Summit. But its wine business in Australia, the UK and the US was severely affected by the global economic crisis, with earnings down 58 per cent to $3.5 million.
Lion CEO Rob Murray – who is credited with the brewer’s stellar performance and could head Kirin’s rapidly expanding regional business should the takeover bid prove successful – said the results demonstrate the company’s resilience in the face of challenging conditions and the ongoing popularity of premium beers.
“Our core beer markets have remained robust despite the economic circumstances, with premium beer remaining attractive as an affordable luxury,” he said. “The level of innovation has had a very positive impact and consumers continue to move to more premium beers. We have seen some switching to at home consumption in particular regions, but overall the market remains in good health.”
Today’s result has encouraged Lion to revise its earning outlook for the 2008-09 financial year by $5 million, with the company’s profit outlook now standing at $305 million to $315 million for the year.
Lion shares were placed on a trading halt following the announcement of Kirin’s bid on Wednesday at which time they were trading for $8.31.