SABMiller's shares took a heavy tumble, after the brewer marginally missed earnings expectations and admitted that, despite signs of economic improvement in some of its emerging market businesses, it didn't expect a broad recovery in consumer spending until the second half of the financial year.
Most worrying was the lack of progress in its Asian business, where trading profits were flat on a constant currency basis at $71m (£50m) despite a 7 per cent increase in lager volumes. In fact, Chinese and Australian volume growth was solid, but that was offset by a 14 per cent volume decline in India as a result of regulatory issues and excise increases. That blow was softened by a solid return from its key Latin American market, which accounts for nearly a third of profits. Underlying trading profits in the region climbed 17 per cent to $1.4bn, even though volume growth was a more pedestrian 3 per cent, with the business benefiting from better cost control and price and mix improvements.
However, broker Evolution Securities had expected an even better performance from the region, pointing out that the price increases had been lower and later than expected. The broker forecasts pre-tax profits of $4.2bn and EPS of 183.5¢ ($3.8bn and 161¢ in 2010), subject to revision following the results.
SABMILLER (SAB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,903p | MARKET VALUE: | £30.1bn | |
| TOUCH: | 1,902-1,903p | 12-MONTH HIGH: | 2,090p | LOW: 1,210p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 1,258¢* | NET DEBT: | 42% | |
| Year to 31 Mar | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2006 | 15.3 | 2.45 | 105 | 44 |
| 2007 | 18.6 | 2.80 | 110 | 50 |
| 2008 | 21.4 | 3.26 | 135 | 58 |
| 2009 | 18.7 | 2.96 | 125 | 58 |
| 2010 | 18.0 | 2.93 | 123 | 68 |
| % change | -4 | -1 | -2 | +17 |
Ex-div: 4 Aug Payment: 13 Aug *Includes intangible assets of $15.9bn or 1,006¢ a share £1=$1.43 | ||||
