Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Frucor drops dividend in 2013 as profit gains

Frucor drops dividend in 2013 as profit gains on smaller royalty payment

By Paul McBeth

July 16 (BusinessDesk) - Frucor Beverages won't pay a dividend to its Japanese parent for the first time since drinks giant Suntory Holdings bought the New Zealand bottler of Gatorade, V, Just Juice, h2go and Pepsi soft drinks in 2009.

The Auckland-based company didn't deliver a cash return to its shareholder for the 2013 calendar year, having paid dividends of $72 million in the 2010, 2011 and 2012 years, a period when it made a combined profit of $80.8 million. Suntory bought Frucor for $82.2 million in July 2009 from France's Danone, and went on to buy local orange juice manufacturer Simply Squeezed for $39.1 million in September of that year.

The suspended dividend came in a year net profit rose to $24.5 million from $22.6 million in 2012, outpacing a 3.2 percent increase in revenue to $437.6 million. The cost of sales rose 4.3 percent to $233.4 million, and Frucor spent $55.8 million on wages, salaries and expenses, up from $48.4 million in 2012. The drinks company had capital expenditure commitments of $5.5 million as at Dec. 31 for the construction of a research and development building, down from $13.5 million a year earlier.

The improved earnings came as Frucor trimmed operating expenses, largely from a drop in royalty payments to $42 million from $48.1 million a year earlier, and could have been bigger had the company not been hit by $12.6 million foreign exchange loss.

In its 2013 annual report, parent Suntory Holdings said Frucor reported growth in overall sales volume with a new product added to its V range of energy drinks, and on favourable sales of Pepsi and other brands in New Zealand. The Japanese company flagged plans to "strengthen the V brand" and an active "expansion of our brand portfolio" for the Frucor unit.

Frucor is still locked in a tax dispute with the Inland Revenue Department over the treatment of its optional convertible notes and at the time of its annual report being published was still awaiting allocation of a High Court hearing after the drinks maker filed papers in the High Court in January 2012.

The tax department disputes some $12.4 million of deductions claimed on interest on the notes between 2006 and 2009. In addition IRD has imposed a ‘use of money interest’ charge of about $6.5 million and shortfall penalties of $3.7 million, notes to the accounts show.

In 2012, it made a second, alternative assessment of non-resident withholding tax amounting to $8.3 million plus interest of $4.8 million and penalties of $4.2 million on Frucor. In making the second assessment, the tax department accepted both the income tax and NRWT assessment couldn’t both stand, according to the accounts.

The High Court has not allocated a hearing date for either proceeding, and Frucor is still of the view the IRD is incorrect. The potential bill, of which certain amounts are subject to the terms of a tax indemnity under the sale and purchase agreement with former owner Danone, is flagged as a contingent liability.

Frucor is held within Suntory Beverage & Food, which went public last year after the parent sold down its holding in an initial public offering that raised almost US$4 billion. Suntory Holdings owns about 59 percent of the listed unit.

Frucor didn't respond to BusinessDesk inquiries.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Leighton-Led WGP To Build, Manage Transmission Gully

The Wellington Gateway Partnership, led by a unit of ASX-listed Leighton Holdings, has won the $1 billion contract to build the Transmission Gully road north of Wellington. More>>

ALSO:

Gareth Morgan: The Government’s Fresh Water Policy – Revisited

Fresh water quality is the latest area to be in the sights of Gareth Morgan and his research organisation The Morgan Foundation... They found that the fresh water policy was a bit murkier than the Environment Minister let on. More>>

ALSO:

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news