UK drinkers lift SABMiller
WORLD number two brewer SABMiller said falls in the price of barley and other raw materials should boost earnings later this year after reporting a forecast beating nine per cent dip in full-year profits.
The group said weak consumer demand, higher commodities and a strong dollar led pre-tax profits for the year to 31 March to fall to $2.96bn (£1.95bn) from $3.26bn.
But despite the fall in profits, the group posted record figures for its UK division Miller Brands. The group said that the reluctance among British drinkers to switch from expensive drinks brands during the recession was boosting trading.
The group said strong demand for its bottled lagers increased its share of the UK premium lager market by 20 per cent. UK sales of Peroni were up 40 per cent year-on-year while Pilsner Urquell grew volumes by 20 per cent. SABMiller said the brands “significantly outperformed” the wider market.
Chief executive Graham Mackay said he expects the group’s overall costs to rise this year, but he hopes to mitigate the effect by beer price rises and cost cuts to hold group profit margins steady.
SABMiller shares yesterday closed up one per cent at 1,231p on top of the stock rallying 35 per cent over the last two months as investors anticipated the fall in commodity prices and strengthening emerging market currencies against the dollar.
The brewer – which also makes Grolsch, Pilsner Urquell and Snow – reported flat underlying annual beer volumes, but saw underlying sales up nine per cent helped by price rises and operating profits five per cent ahead at constant currency.