AUS: Lion Nathan confirms 2005 forecast

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Lion Nathan has said it is on target to reach its full-year net profit after tax forecast for 2005 of between A$230m and A$235m before one-off charges.

"The performance of our Australian beer business has improved over the year and while the New Zealand beer market remains challenging, it is pleasing to confirm our previous guidance of full year NPAT from operations of between A$230m and $235m," said Lion Nathan CEO Rob Murray. "This is prior to the impact of previously announced one-time costs relating to the Two Dogs product recall of A$5.8m and other fourth quarter one-time charges."

The company also reported that total beer volumes for the group during the third quarter were flat at 188m litres excluding licensed XXXX volume in the UK and its now discontinued Chinese operations.

Australian beer volumes were marginally ahead of the same quarter last year, but slightly down on a year-to-date basis, reflecting an overall market volume decline. But that decline was offset by premium brand sales growth and improved pricing, the company said.

New Zealand beer volumes for the quarter were ahead of the same period last year but on a year-to-date basis fell by 5%. The company said that legislative changes and a competitive pricing environment had impacted on its New Zealand business, with a 12% to 18% drop in EBITA to between NZ$75m and NZ$80m forecast.
"While the expected New Zealand full-year result is disappointing, we take heart from recent performance improvements, especially in market share and customer engagement," Murray said. "We are also recognising the need to address stock weight building in prior years, which is greater than we had previously anticipated, the impact of which will be fully realised in the fourth quarter."

Lion Nathan has also announced the completion of the joint venture deal between its Australian wine operation, Distinguished Vineyards, and Australian wine distributor, Tucker Seabrook, to market, sell and distribute wines from both companies' portfolios. The joint venture is expected to be operational from October.

Sectors: Beer & cider, Wine

Companies: Lion Nathan

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