DB earnings flat as beer stands alone

By PAULA OLIVER

Streamlined brewing giant DB Group yesterday gave its shareholders their first glimpse of life without wine when it reported a solid interim result.

After shedding the Corbans Wines business last year to concentrate on beer, DB returned a net profit for the six months to March 31 of $48.7 million - a figure inflated by $34 million in proceeds from the Corbans sale. The $34 million was distributed to shareholders in December.

The previous half year yielded a net profit of $15.2 million.

Group managing director Brian Blake said the transformation of the company - staff and cost cuts and the sale of non-core businesses - had had a profound impact on the size and shape of the group.

He gave no indication of how much the furore surrounding the company's attempt to close its West Coast Monteith's brewery had cost in dollar terms, but described the half-year result as "most satisfactory."

Earnings from continuing operations, before interest and tax, were $20.4 million - flat compared with the previous period's $19.3 million. But brewing earnings before interest and tax fell slightly, which Mr Blake attributed to cost pressures, in particular the exchange rate and inflation.

Although the overall beer market declined in volume during the period, Mr Blake said, DB had slightly increased its sales to a market share gain of 1.1 per cent.

"This is very significant given this year's sales result was achieved without the one-off impacts of the initial load into supermarkets, the millennium celebrations, or the America's Cup," he said.

Revenue for the half year was $156 million, up slightly on the corresponding period if the wine and liquor businesses were removed.

Mr Blake said he was "cautiously optimistic" that DB would meet its targets for the year. The company's biggest challenge would be to manage costs, and it would focus on building the value of its premium and mainstream brands.

Tui continued to be DB's fastest growing mainstream beer, growing particularly in areas north of Taupo. A $60 million packaging hall, using some of the cash from selling Corbans, is due to be commissioned in September.