AUS: Foster’s on the rise – just – in H1

Foster's Group has posted a slight rise in both sales and income for the first half of its financial year.

The Australia-based drinks company has today (20 February) reported a 3.5% year-on-year rise in sales for the six months to 31 December, coming in at A$2.4bn (US$1.9bn).

Net profit, which was up 90% to A$533.4m thanks, in part to last year's brewery sales in Vietnam and India. Excluding significant items, earnings rose 11% to A$363m.

Global wine volumes for the company were up by 3.1%, although a poor set of figures for flagship brand Rosemount - down 15% in volume and 20% in value - offset more impressive numbers from Wolf Blass and Lindemans.

Rosemount has been the subject of a relaunch in both the UK and Australia in the six-month period. The company noted that its integration of Southcorp, which Foster's bought in 2005, had been "substantially completed in the first half".

Domestically, Foster's non-wine portfolio was reasonably flat, with growth in premium and mid-strength beer balancing out a fall in light beer sales and volumes.

The company noted, however, that inefficiencies at its Australian and US packaging facilities, coupled with further inefficiencies in its domestic wine export logistics operations, led to first-half costs rising by A$20m more than anticipated.

Regarding this year's Australian wine harvest, Foster's concurred with recent industry estimates that production will come in 40% on last year, thanks to adverse climate conditions.

Moving forward, Foster's CEO, Trevor O'Hoy, said: "Sustained brand investment, improving route-to-market models and operating efficiencies will drive accelerating earnings growth in the second half, and for the full-year."

The company unveiled a A$400m off-market buyback, marking a 100% increase in its repurchase programme announced in August.