AUSTRALIA: CCA to beat targets, settles tax row
A busy day for Coca Cola Amatil Ltd has seen the bottler predict profit to beat targets, and settlement reached with the Australian Taxation Office.
The company said today that it expects net profit for 2003 before significant items to be up by 16% year-on-year. This would beat CCA's long-term 10% to 15% growth target range. In a statement, managing director Terry Davis said: "It is very pleasing that this will be the third consecutive year of double-digit growth in net profit." In 2002, CCA's net profit from continuing operations was A$209.5m (US$158.9m).
The bottler also announced today that it has settled a dispute with the Australian Taxation Office relating to the demerger of its European operations in 1998. CCA said it will pay an additional A$50 million to the ATO. The effect on its net profit will be A$44.6 million, and will be recorded as a significant item in the company's accounts for the year ended 31 December.
Coca-Cola Amatil's managing director Terry Davis said the settlement will bring to a close the ATO's tax audit with respect to the company's European demerger. The company "obtained extensive legal, tax and accounting advice and continues to regard its tax treatment of the demerger as correct."
"However, in view of the potential legal costs, the uncertainty involved in litigation, and the considerable management time and effort required in litigation, we believe the matter has been settled at an acceptable level," Davis said in a statement to the Australian Stock Exchange. The tax settlement will not impact the final 2003 dividend.
The company will report its annual results next Thursday (12 February).
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