By Andy Young 

Lion has published its trading update for the half-year ending 31 March 2016, in conjunction with the half-year announcement from its parent company Kirin Holdings.

Lion’s underlying net sales revenue fell by 2.1 per cent, with an actual net sales revenue across the group of $2404m. The company said that a “focus on higher value product categories” as well as “good cost management” helped the group to deliver a two per cent increase in underlying group operating earnings to $406.1 million for the half, with actual Lion group operating earnings of $384 million. Lion said it "remains on plan" to deliver full-year earnings.  

Lion CEO Stuart Irvine said: “The top-line sales numbers largely reflect our decision to exit the low margin everyday cheese category and the loss of private label milk contracts. Even so, consumer confidence remains fragile and we have seen market-wide volume declines in key categories.   

“Lion continues to invest to reinvigorate the beer categories in both Australia and New Zealand through our Beer the Beautiful Truth initiative and to focus our Dairy and Drinks business on categories with the greatest potential to deliver sustainable returns, in line with our turnaround plan.  

“While it’s still early days, Lion Asia Dairy has continued its solid start and we already enjoy category leading yoghurt brands in Singapore and Hong Kong.  

“Our more recently formed Lion Global Markets business is also making inroads. We were excited to open our first Little Creatures hospitality venue in Hong Kong in July, tapping into the burgeoning craft beer scene in Asia.”  

The group’s beer, spirits and wine division in Australia saw total volumes decline by 3.2 per cent, but a strong performance from the craft portfolio helped to soften the revenue impact. 

That craft beer performance was underlined by double digit growth for James Squire 150 Lashes, Little Creatures Pale Ale and James Squire Hop Thief. The company also said that plans are “well underway” for the refurbishment of the the Byron Bay Brewing Co’s hospitality venue on the north coast of NSW. Lion bought the Byron Bay brewer in April this year.

Finally Lion confirmed that the transfer of the AB InBev brands will happen on 1 October, but the company said that it “retains a compelling blend of domestic and international brands, including via its joint venture with Heineken, and looks forward to investing behind these brands for future growth”.

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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