Foster's confident of meeting growth forecast

MELBOURNE - Foster's remains confident of achieving 12-14 per cent normalised earnings per share (EPS) growth in 2005/06.

The brewer and winemaker today posted a 62 per cent plunge in first half net profit to A$291.1 million ($320.34 million).

Foster's chief executive Trevor O'Hoy said the key drivers for growth over the next two years will be continued revenue momentum in its Australian multi-beverage products.

He said earnings growth will return to historic levels after the initial impacts of cost saving projects on the 2006 earnings.

Other drivers for growth include synergies gained from the Southcorp acquisition, continued pursuit of efficiency opportunities and sustained innovation and investment in brands.

"Despite the significant integration effort underway, and the difficult trading conditions in some of our markets, Foster's has achieved double digit earnings growth in the first half," Mr O'Hoy said.

"(We) remain confident of its ability to meet the previously indicated normalised earnings per share growth rate of 12-14 per cent for the full year 2006."

He said the group is also confident of meeting the financial targets set at the time of the Southcorp acquisition last year.

Mr O'Hoy said the brewing division, CUB, had an outstanding first half with earnings ahead 17.9 per cent from the previous corresponding period to A$371.6 million.

"CUB's results highlights the potential of our multi-beverage strategy in Australia to create revenue and margin opportunities for both customers and Foster's," Mr O'Hoy said.

He said wine trade earnings lifted 58.9 per cent to A$204.4 million driven by the Southcorp acquisition and related synergies.

First half earnings included A$23 million in synergies from the Southcorp integration, with the program on track to deliver around A$50 million for the 2006 financial year.

Foster's declared a fully franked dividend of 9.75 cents per share compared to 9.25 per cent for the same time last year.

- AAP