By Ian Neubauer
Lion Nathan has attributed investments in the manufacturing and marketing of the lucrative low-carb, mid-strength, step-up and premium beer categories for increases in sales volume and operating profit for the 12 months ended September 30.
Lion announced its full-year results yesterday (November 18) at its annual general meeting in Sydney amid continuing media hype surrounding its ambitious but reportedly undervalued bid for Coca-Cola Amatil (CCA).
Lion declared an after-tax net operating profit of $272.7 million for the period — representing a 3.3 per cent decrease compared to 2007.
But adjusted for the one-off cost of last year’s $5.6 million acquisition of Tasmanian brewer J Boag & Son, net profit increased 4.2 per cent to $278.3 million for the period.
Star performers in Lion’s portfolio include Tooheys Extra Dry, which grew by more than 20 per cent for the second year running; and Hahn Super Dry, which grew by more than 125 per cent in the low-carb category.
Lion’s largest brand XXXX grew 3 per cent by volume and 5 per cent in revenue, while Tooheys New grew revenue by 2 per cent in the face of what the brewer called a “slight” decline in volume.
“The Australian business continues to achieve double digit revenue growth off the back of increased brand strength due to marketing investment,” said Lion CEO, Rob Murray.
“Our FY08 result reflects the positive momentum within our business.”
Looking forward, Murray pointed to “huge” growth opportunities for J Boag & Son, with demand for its core beer products underpinning earnings and cash flow.
Lion says it is on track to step up earnings to at least $300 million in 2009 as a result of cost savings gained from brewery upgrades and improved sales.
Lion Nathan shares were trading at $8.26 on the Australian Securities Exchange at midday today (November 19) compared to $9.07 seven days ago.
The brewer’s shares lost a hefty $1 on Monday and Tuesday (November 17 and 18) following the announcement that it had made an $8 billion takeover bid for CCA.