The Australian beer and wine group Foster's said today that it was at the "front end of a sustained period of strong organic growth."

The company reported earnings per share for its first six months up 5.3% to 37.8 cents per share, benefiting from continued share buy-back activity during the period.

In terms of the outlook for fiscal 2005, Foster's said it was now poised to deliver low double-digit normalised EPS growth for the continuing businesses.

Earnings, excluding discontinued businesses, one-off items, goodwill and a grape accounting charge, totalled A$315.4m for the six months to December 31, against A$307.4m a year earlier.

Net profit before one-off items dipped to A$295.3m from A$299.8m a year ago.

In its Carlton United Breweries division, EBITA increased 9.7% to A$317.7m driven by revenue, product mix, channel mix and cost control in its beer business, and by increased volumes in the profitable nonbeer portfolio, the company said.

In spite of a highly competitive pricing environment, Foster's said its international brewing arm, FBI, saw EBITA increase 5.5% to A$23.1m.

"Trading conditions in the key markets for Foster's are very competitive, with total FBI volume decline of 1.2% primarily driven by aggressive competitor pricing activityin the UK off trade during the peak Christmas period," the statement said.

Meanwhile, wine trade volumes increased 12.2% to 9.7m cases with all regions delivering growth ahead of the premium category. Net sales revenue increased 5.7%, or 9.9% excluding exchange rate movements.

Total Beringer Blass Wine Estates EBITAS declined 3.4% to A$137.2m. But excluding exchange rate movements, the wine arm delivered a marginal increase in EBITAS.

President and CEO, Trevor O'Hoy said: "Today's results show signs of the significant progress being made across the Group - with Foster's earnings growth now approaching its long-term double digit target, following three years of low growth.

"On a continuing business basis, normalised EPS increased 9.7%. This was driven by a solid performance from CUB, stabilisation of the Wine Trade business and continued capital management activities. The result was achieved despite a number of "one-off" or "catch-up" costs during the period."

On the strategic front, Foster's announced on 17 January 2005 its intention to make an off-market takeover for Southcorp, following the acquisition of the Oatley family's 18.8% stake.

O'Hoy said: "Our offer is now open and capable of acceptance, and we are confident of success given the attractiveness of the $4.17 per share price we are offering Southcorp shareholders. Foster's remains firm in its view that it is the natural owner of the Southcorp wine portfolio, the acquisition is financially robust, and that it will deliver long term value for Foster's shareholders."