DB results flat in spite of marketing push

By SIMON HENDERY

DB Breweries yesterday reported flat full-year earnings from ongoing business after spending more to market its beer into a stagnant market.

While sales revenue rose 3 per cent from $278 million to $287 million during the year to September 30, earnings before interest and tax fell 3 per cent from $31 million to $30 million.

Last year the company's $58.3 million bottomline profit was boosted by the $37.4 million it received though the sale of Corbans Wines to Montana. A deferred component of the sale added $2.9 million to this year's result - a bottomline profit of $22.6 million.

DB managing director Brian Blake said sales were up despite volume and the company's market share remained unchanged from the previous year.

"[The sales growth] was driven by continued strong growth in premium brands plus price increases taken in mid-2002," Blake said.

"During the course of the year we chose to undertake increased marketing activity and we are encouraged by the double-digit growth of both Heineken and Monteith's."

The company has just completed a two-year, $60 million upgrade at its Waitemata Brewery in South Auckland, which is now home to all of DB's 300 Auckland staff.

The development - involving a high-tech packaging plant, a new administration building and a road realignment around the 16ha brewery site - was opened yesterday by Cabinet minister Mark Gosche.

Blake said the new packaging facilities were the most modern for the brewing industry in the Southern Hemisphere and would give DB the flexibility to meet changing consumer demands well into the future.

"The new hall also provides for expansion down the line if and when DB Breweries requires it, and allows us to continue our focus on growing the beer market overall by creating and marketing innovative products," Blake said.

The company, 77 per cent owned by Singapore-based Asia Pacific Breweries, will pay a final dividend of 14.5c a share on December 4, down from 16c last year.

DB shares rose 5c yesterday to $6.15 on very light volume.