DB On Track For Target After Impressive First Half

DB On Track For Target After Impressive First Half

DB Breweries has continued its impressive growth trend, posting a $17.2 million net profit for the six months ended 31 March and placing the company in a sound position to achieve its full year target.

Earnings before interest and tax for the six month period were up 14.2% at $26.8 million, compared with $23.4 million in the same period last year.

DB Breweries' Managing Director Brian Blake said that the 14.2% increase in EBIT put the company in a good position looking forward.

"With an excellent first half result we are well placed to achieve our growth target for the year, barring unforeseen circumstances.

"The company has moved quickly to address rising costs and pricing pressures in the marketplace to ensure that margins are not adversely affected in the second half of the year.

"There will also be a continued focus on strengthening brands in order to drive volume and sales," he said.

DB Breweries' Chairman Sir Colin Maiden said the directors were pleased to announce a fully imputed interim dividend of 16.5 cents per share and a supplementary dividend to non-resident shareholders of 2.91 cents per share (to be paid on 9 June to shareholders on the register at 5pm on 28 May 2004).

He said the company continued to build value, with shareholders' equity at $154.1 million, compared to $146.1 million for the same period last year. Net operating assets were $184.2 million, remaining the same as the 2003 period, with net debt falling from $30.7 million in 2003 to $18.3 million as at 31 March 2004.

DB's effective tax rate for the period was 33% compared with 25% for the same period last year. "This is a result of the company taking up a one off reversal of an income tax provision of $1.9 million in the previous period," said Sir Colin.

Mr Blake said net sales were up 7.3%, with a number of very successful sales and marketing campaigns contributing to strong growth for the company's key brands.

He said the result justified the investment the company continued to make in building strong brands and brand loyalty, as well as its commitment to raising its level of strategic investment in key on premise outlets.

"Our brands, particularly Heineken, Monteith's and Tui, have continued to strengthen in a highly competitive market.

"Heineken has retained its standing in the premium segment, assisted by several high profile sponsorships, including last year's Rugby World Cup.

"Consistently exceeding expectations outside its traditional lower North Island market, Tui has maintained excellent performance in supermarket sales and has continued to enjoy growing loyalty, aided by several innovative marketing promotions.

"Monteith's commitment to innovation has been further demonstrated with the opening of additional Monteith's bars, now numbering nine around the country," said Mr Blake.

Newcomer to the market, Amstel Light, had been instrumental in reinvigorating the low alcohol beer market and the brand was continuing to outperform expectations in its first year. Also showing consistent growth since its introduction was Tiger, which had proven itself as a great premium partner to Heineken thanks to a successful on-premise distribution strategy.

Looking forward, Mr Blake said the company was on track to achieve DB Breweries' vision of becoming New Zealand's most valuable brewery.

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