Foster's reported today (9 September) that its newly acquired Southcorp business made a A$54.1m net loss in 2004/05. The company was hit by significant items before tax of A$229.9m, including A$16.5m in costs associated with the defence of the Foster's bid.

There was also a write-down in the carrying value of the Rosemount brand of A$149.3m following an independent valuation of brand names. The total amount attributed to brand names by the valuer amounted to A$719m, compared to a carrying value, before the write-down, of A$366m.

On top of that, Southcorp reported A$77.9m in restructure costs associated with the Foster's takeover and the settlement of a long-running divested business legal claim in favour of the company, amounting to A$13.8m.

Southcorp's net profit, before significant items, was up 21.1% to $132.0m.

Earnings before interest, tax, amortisation and significant items was up 11.1% to A$196m and above the forecast of A$186m included in the Target Statement prepared in response to the Foster's bid.

"Southcorp achieved an improved underlying profit performance on flat sales revenues for the year ended 30 June 2005 despite tough market conditions, the continued appreciation of the Australian dollar and the distractions of the Foster's bid," Foster's said.

"The integration of Southcorp with the Foster's wine business has commenced and may result in restructure and redundancy costs and in the recoverable amount or net realisable value of certain assets being less than carrying value."