'Transformational year' for Euro No.1 S&N
Scottish & Newcastle, the international brewer and retailer, has unveiled full-year earnings of £442.3m, to make it the largest brewer by profit in Europe.
The pubs and pub-restaurants division saw strong growth, with underlying profits in its 1,500-strong estate rising eight per cent to £213.8m. Like-for-like sales were up 1.6 per cent.
Operating profit in the international beer division leapt 52 per cent to £107.3m. This followed full-year contributions from Kronenbourg, the beer business S&N bought from French food group Danone, two years ago.
The company described the last 12 months as a transformational year. It had sold 1,200 pubs and increased its brewing presence around the world.
In January, the company took a foothold in the India market with a 40 per cent stake in a joint venture with United Breweries. United Breweries has a 37 per cent share of the Indian beer market.
In February, S&N bought brewer Hartwall for £1.2bn, giving it a dominate position in Finland and a 37 per cent stake of the Russian market.
"Overall, a solid set of results," said beverages analyst Stuart Price, from WestLB Panmure. The company did not reveal securitisation plans for its pub estate as anticipated.
"The future of the pubs is not in doubt," added Mr Price. "Management has confirmed that it is looking to release capital from the estate and we think that this could happen before Xmas - especially given that Danone wants the final payment for the Kronenbourg business in September."
Group debt fell by £539m to £1.2bn, largely due to pub sales. Capital investment in S&N's retail division is focused on Chef & Brewer and Premier Lodge. The group saw an invested rise in like-for-like sales at Chef of 17 per cent, and like-for-like rise in revenue per room of 10 per cent for Premier Lodge.
The group saw a 15 per cent return on capital.
Earnings grew by 1.6 per cent to 43.7p per share. The proposed final dividend was 19.41p, a rise of four per cent.
Future growth remains a worry," said Mr Price. "The stock remains an income story and a potential value story - if you believe that the company will be bid for."
Related articles:
S&N to securitise 1,000 pubs for £1.5bn (1 July 2002)
