The KWV Group succeeded in not only maintaining its headline earnings for the six-month period to 31 December 2000, but achieved a 1.9% increase. This is in spite of a 20.8% reduction in the attributable income from the group's associate company Distell and continued pressure on sales in the local liquor market.

Headline earnings for the group are R59.2m ($7.41m), compared with R58.1m ($7.27m) for the same period in 1999, according to the group's interim report released to shareholders today.

Headline earnings per share were up 2% from 14.9c to 15.2c, while no share dividends were issued.

Income for the period was marginally higher at R478.4m ($59.8m) compared with R471.2m ($58.9m) for the same period in 1999.

The KWV Group said that due to the seasonal nature of wine and brandy sales, the largest portion of the group's turnover was generated during the first six months of the financial year and was not expected to be repeated in the second half. This trend was accounted for in the group's business plan for the full year.

It was also expected that there would be a further negative effect on the group results for the full year as a result of the reduction in equity income from Distell. This expectation is in accordance with the profit warning issued by Distell in December and ongoing difficult conditions in the domestic market.

Besides exporting wine and spirits products, KWV also produces 50% of all brandy in South Africa. This segment of the market has been under extreme pressure for the past three years.

The KWV group also has a 25% share in Ceres Fruit Juices, a Cape-based natural fruit juice company.