Aussie beer sales boost Lion result

By Phil Boeyen, ShareChat Business News Editor

Friday 9th November 2001

Brewer Lion Nathan (NZSE: LNN) has posted a much improved net profit helped by strong beer growth in Australia and the sale of its stake in Montana.

For the year ended September Lion Nathan made an after-tax profit of $151.8 million. That compares to last year's 13-month result of just A$3.7 million after the company took a $120 million writedown on it China operations.

Although the company posted a loss of A$19.3 million on its China business in the latest result that is a 21% improvement over last year.

Lion says brewing earnings before interest, tax and amortisation rose 11% to $335.2 million. Most of this growth came from Australia where Ebita rose 11% to A$297.6 million while the operations in New Zealand increased 2% to A$79.5 million.

The company booked a post-tax gain of A$64.9 million on the sale of its Montana shares to Allied Domecq but that was partially offset by write downs and restructuring provisions of A$48.5 million after tax.

Lion Nathan CEO, Gordon Cairns, says the latest results show an excellent performance from Lion Nathan Australia which, in a market adversely impacted by a GST associated excise increase, lifted volume, revenue, earnings before interest and tax and amortisation and market share.

He says the group result overall was pleasing in difficult trading conditions.

"We have again demonstrated that our brewing businesses are performing well in competitive markets as we build on the momentum of the past three years. I am confident that we can continue to deliver this sort of result on a consistent basis.

"With the solid performance from our beer business and the sale of Montana we have demonstrated an ability to manage brands, drive value from our business and create shareholder value. We will be applying the same disciplines and skills in the coming years as we execute our branded liquor company strategy."

Mr Cairns says the company is in a strong financial position as a result of the Montana sale and the A$177 million of operating cash flow generated during the year.

Wine features strongly on the company's menu for the coming year.

"Building on the strong financial position we have established, and given the stable cash flows being generated, we are committed to building a value creating premium wine business," says Mr Cairns.

"The acquisition of Petaluma, with its great brand portfolio and strong management team provides us with a cornerstone for our wine strategy."

Lion Nathan says while the Petaluma and Banksia acquisitions, if successful, are likely to be earnings dilutive initially, the company remains committed to double-digit earnings growth.

A fully franked final dividend of A8 cents per share has been declared to bring the year's total to A16 cents per share.

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