Molson Coors UK income up in Q2

Molson Coors Brewing Company, the international brewer, has reported a rise in pre-tax income in the UK of 6.1% in Q2 2011 despite lower volumes due to last year's football World Cup.

The company highlighted a temporary reduction in marketing spend, a fall in pensions payments and favourable foreign currency movements. The pound appreciated about 9% against the US dollar, improving pre-tax earnings by about $3m, while marketing and other administrative expenses fell 7%.

Net sales per hectoliter of owned brands increased 7%, aided by the introduction of Corona and other Modelo brands to its sales mix - the company began distributing them in the UK at the start of 2011.

The Modelo brands also helped increase the cost of own-brand goods sold by 16% in the period.

The UK owned-brand sales-to-retail figure declined 5.7%, with the timing of the World Cup given as a reason. The company's UK market share increased in the quarter, as total UK beer volumes fell about 10%.

Internationally, Molson Coors reported a 1.2% decline in underlying income after tax to $231.6m.

"Positive beer pricing, cost reductions in our core businesses and favorable foreign exchange were offset by the impact of continuing weak economic conditions, commodity inflation and investments in our international business in the quarter," said president and chief executive Peter Swinburn.

Net income from continuing operations fell 5.7% to $224.3m. Net sales were up 5.7% to £933.6m against beer volumes down 2.8% to 13.07m hectolitres.

The company announced a share repurchase programme valued at $1.2bn.

"In the past several years, we have continued to strengthen the Company's balance sheet, added new brands and businesses in select markets, and doubled our dividends," said Swinburn.

"The combination of substantial cash generation and cash balances now also permits us to use our cash to increase returns to shareholders through a stock repurchase program."