SABMiller beats forecasts but warns of slowdown in some markets
2012-11-27 10:59:23
SABMiller, one of the world's largest brewers, managed to beat analysts' forecasts in the first half as its hiked its interim dividend by 12 per cent.
However, while the beverage firm said that it grew volumes and revenues across most regions during the period, it did admit to a moderation of growth in some emerging markets.
The company reported revenue of $17,476m in the six months to the end of September, up 11% on $15,688m reported the year before, and better than the $16,940m that Charles Stanley was expecting.
The company, which acquired lager group Foster's last year for nearly $11bn, said that the brand contributed "significantly" to its first-half performance.
SABMiller said that foreign exchange movements, such as the weakening of the South African rand and Central European currencies, had an adverse impact of six percentage points on revenue growth during the period.
Earnings before interest, tax and amortisation jumped 17% year-on-year to $3,173m, better than the $3.1bn Bloomberg consensus estimate, as strong growth in the Americas offset a 10% decline in Europe. However, the company did warn of "more modest" volume growth in Latin America, its largest region, in the second quarter as the pace of economic growth slowed.
Group profit before tax rose 12% from $2,041m to $2,269m. Meanwhile, the interim dividend was raised by 12% from 21.5 cents per share to 24.0 cents per share. Free cash flow for the period was $1,684m, up 14% year-on-year from $1,479m.
"Broad-based revenue and profit growth in the first half reflects the continued success of our approach to the development of our brands, product portfolios, distribution and sales effectiveness," said the group's Chairman Graham Mackay.
In a separate statement, the group said that its UK subsidiary, Miller Brands UK, delivered "another strong period of lager volume growth" during the first half, with domestic volumes rising 5% compared to the 4.6% average decline in the beer market elsewhere.
Commenting on the company's results analyst Dirk Van Vlaanderen, at Jefferies, says that: "Outlook is traditionally vague with management highlighting a moderation of economic growth in some countries, but on balance the main emerging markets in which SAB operates remain strong.
"The flat share price performance of SAB Miller since the trading update in October has seen its peers catch up in terms of valuation with the company trading on a calendar 2013 price-to-earnings ratio of 15.8 times (versus peers on circa 14.3 times) which we believe remains attractive given SAB Miller's higher us-growth profile (earnings per share (EPS) compound annual growth rate (CAGR) of 14% versus peers on circa 11%) and strong emerging market footprint."