Category: Business, Economics and Finance / Company News / Food and Beverage / Retail

Coca-Cola Amatil loses its fizz, Super Retail drops on restructuring

Friday, 26 Aug 2016 09:21:03 | Stephen Letts

Coca-Cola Amatil (CCA) has boosted its first half profit by 8 per cent to $198 million, despite going backwards in its key Australian beverages market.

Pre-tax earnings in Australian beverages dropped by almost 2 per cent as the company continued to shift away from its traditional strength in sugary, carbonated concoctions to water, dairy and energy drinks.

Australians quaffed 9 per cent more of CCA's still products, while "sparkling beverages" - which includes Coca-Cola - fell by 6 per cent, from 108 million litres in the first half of 2015 to 101.7 million litres this year.

"Consumer tastes and trends in Australia are continuing to evolve and our focus over the last two year years has been rebalancing our portfolio," chief executive Alison Watkins said.

"We are moving to meet consumer demands with a greater focus on portion size and product reformulations in sparkling and greater investment in stills."

Shepparton-based food business SPC reported a "modest" loss for the period, hit by lower volumes and revenues from heightened competition.

"While there were some encouraging signs in SPC's snack fruit and tomato products, this has been offset by declines in its traditional canned business," Ms Watkins noted.

The standout growth markets were Indonesia and Papua New Guinea where pre-tax earnings jumped 72 per cent and the alcohol and coffee division which reported a 34 per cent increase in earnings.

The interim dividend edged up 1 cent to 21 cents per share.

The result did not excite the market with shares slipping 2 per cent to $9.40 at 10:20am (AEST).

Super Retail Group slips on restructuring costs

Leisure, automotive and sports-focussed Super Retail Group has seen its results clipped by restructuring costs and brand impairments, with net profit sliding 30 per cent to $62.8 million.

On an underlying basis, profit increased 2.2 per cent to $108.6 million, which was in line with market expectations but, as the company noted, it was also supported by an extra week's trading in the results.

Super Retail Group has been growing rapidly, adding household names such as Rebel, Rays, Amart Sports and BCF to its original Supercheap Auto brand.

Full-year sales for the group came in at $2.42 billion, an increase of 8.2 per cent over the year, and well ahead of the annualised pace of 3.1 per cent the Australian Bureau of Statistics recorded for retail sales growth over the same period.

The sports business out-paced auto parts, with before tax earnings growth of 18.6 per cent and 9 per cent respectively.

The leisure division - including camping specialists Rays and BCF - was in the doghouse, with earnings down 42 per cent on the back of tougher competition, heavy discounting in stock clearance and higher production costs.

The integration of the Rays and Infinite Retail businesses incurred restricting costs of $45.8 million.

The company also invested an additional $81 million in new and refurbished stores.

Super Retail chief executive Peter Birtles said the new financial year looked promising with like-for-like sales delivering "a positive hike" despite a slowdown in demand in the immediate aftermath of the federal election.

Mr Birtles said the company should benefit from ongoing low inflation in the economy and expected to continue to outpace the markets in which its businesses operate.

Cash flow grew by 10 per cent to $159 million, allowing the company to increase the full-year dividend by 4 per cent to 41.5 cents per share.

Super Retail shares were up 4 per cent to $10.20 at 10:55am (AEST).



 

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