Lion Nathan half-year profit at A$100M

By Phil Boeyen, ShareChat Business News Editor

Thursday 16th May 2002

Australian-based brewing and wine company, Lion Nathan (NZSE: LNN), has topped the tonne in interim earnings with a net surplus of A$100.1 million for the six months ended March.

The net profit for the period was 12.5% up on last year's interim surplus. Neither result included any individual significant items.

The company says that during the six months it made further inroads into its stated strategy of building a premium wine business with the completion of the purchase of Petaluma, and by increasing its holding in Banksia Wines to approximately 85%.

CEO Gordon Cairns says the result is further confirmation of the company's commitment to deliver double digit earnings growth on a consistent basis and it remains on track to deliver this for the full year.

"In challenging markets, our beer businesses have all produced satisfying and very worthwhile results and I am confident that the momentum of the first half will be maintained.

"The completion of the acquisition of Petaluma and Banksia has provided us with a great platform on which to build our premium wine business. During the period we made excellent progress in bedding down both acquisitions, while at the same time maintaining the growth of our outstanding portfolio of premium wines".

The company reports that its brewing businesses in Australia, New Zealand and China grew earnings before interest, tax and amortisation by 7% to A$217.3 million.

In China, where the company has been badly hit in the past, it reports that volumes were up 40% for the period and it is continuing to bring down losses.

There's also better news from New Zealand where the company says the beer market is beginning to show signs of recovery after a number of years of market decline,

"This trend has been driven by concerted efforts by the industry to increase the relevance of beer, greater on-premise investment and improved retailing following the introduction of beer in supermarkets," says Mr Cairns.

"Initiatives by Lion include its Heritage Centre in Dunedin, the recently completed Lionzone in Newmarket, the promotion of tap beer quality through the "Beermaster Awards" and the development of theme bars such as the Belgian Beer Cafes and Speight's Ale House."

Looking forward Mr Cairns says the company is well placed to further benefit from enhancement of returns from its beer business, consolidating its distribution platform in its wine business, and capturing growth in Australasia's ready-to-drink (RTD) market.

Lion is paying a fully franked interim dividend of A8 cents per share.

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