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AUS: Foster's Group celebrates strong H2 results

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Foster's Group Ltd. has posted a healthy rise in H2 profits. The Australian beer and wine company said today (30 August) that earnings in the six months to 30 June were up by 10% to A$186.5m (US$140m) from A$169.6m in the corresponding period a year earlier.

Full-year net income at the company was up by 17% to A$936.1m, thanks in part to A$454.4m in one-time gains, primariy from the sale of Foster's Lensworth property unit.

The strong figures were credited to a 5% rise in beer prices and heavier advertising for brands such as Victoria Bitter and Carlton Draught.

At Beringer Blass, Foster's wine company, H2 earnings before interest, tax and amortization were up by 38% to A$150.6m, including A$20.5m contributed by recently-purchased Southcorp. For the full year, wine earnings increased by 9.1%, the first annual increase in three years.

In a statement, president and CEO, Trevor O'Hoy, said: "After a year of transformation Foster's Group sits at the doorstep of a period of sustained, strong earnings growth and today's results start to show promise of what the Group can deliver into the future.

"On a continuing business basis, normalised EPS increased 14.1% - achieving the group's 10% earnings growth target ahead of schedule. This result was driven by strong performances from the core CUB and Wine Trade operations and lower share count.

"Foster's Global Wine Trade business delivered a strong set of results despite a period of significant change. Key initiatives outlined as part of the Wine Trade Operational Review in June 2004 were successfully implemented over the period with significantly increased marketing spend stimulating above category volume growth in all key markets."

"The successful A$3.7bn acquisition of Southcorp in May was transformational for Foster's and provided the wine business with scale, portfolio strength and significant opportunities for revenue growth. I am impressed with the considerable progress that has been made in a short space of time, bringing the BBWE and Southcorp wine businesses into a single organisation.

"Overall, I am extremely pleased with the group's financial performance for fiscal '05. Despite a period of significant change, business momentum has been maintained, and strong earnings growth achieved. I am confident that Foster's Group is now well positioned to drive value creation for shareholders via further accelerating momentum in multi-beverages in Australia and improving the profitability in global wine."

Directors declared a final dividend of 10.75 cents per ordinary share fully franked, an increase of 2.4% on the F04 final dividend.

In a seperate development today, Foster's announced the sale of two of its Australian wineries.


Sectors: Beer & cider, Wine

Companies: Foster’s Group Ltd

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