Top story

Revenues have fallen 10% to $19.8bn at brewing giant SABMiller (SAB) as a number of the currencies it trades in across the world slumped against the US dollar.

Group net producer revenue (NPR), which strips out excise duty and other taxes, was also down 8% to $24.1bn on a reported basis in the year to 31 March.

Pre-tax profits at the brewer also slipped 16% to $4.1bn as the business was hit by exceptional charges of $721m because of costs associated with the ongoing AB InBev merger and the write-off of investments in Angola and South Sudan.

However, on an organic constant currency basis, SAB managed to increase revenue 7% and NPR by 5%, with EBITA (earnings before interest, tax and amortisation) up 8% to $5.8bn

Group beverage volumes increased by 2%, with lager volumes up 1% and soft drinks volumes up 6%, thanks to strong growth in Africa and Latin America, which was offset by weakness in China and the US.

CEO Alan Clark said the annual figures were “good results”. “We grew EBITA across all regions and our group EBITA margin improved through the year, on an underlying basis.

“This performance reflects our focus on driving superior growth by strengthening our core brands, expanding the beer category to reach more consumers on more occasions and placing an emphasis on premiumisation in all regions.

“As noted through the year, the strengthening dollar against our operating currencies had a material negative impact on reported results.”

He added that underlying growth accelerated in the year, driven by improving momentum in Latin America, continued strong and well-balanced momentum in Africa and improvements in Australia and Europe in the second half.

“We are expanding our exposure to growing markets and building the optimum portfolio of lager, soft drinks and other alcoholic beverages to capture growth.

“Achieving these results this year, notwithstanding economic and currency volatility and the distraction of the AB InBev offer, is a testament to the dedication and hard work of our people.”

The group said it expected to deliver a good underlying performance in the year ahead.

Shares in SAB have nudged up 0.4% this morning to 4,226p.

Morning update

Airport concession group SSP (SSPG) has seen like-for-like sales take off in its first half, up 3.3% to £897m – 4.4% higher than a year ago overall. The business, which operates food and beverage outlets in travel locations across the world, said the results in the six months to 31 March had been driven by growth in air passenger travel and retailing initiatives. Operating profits soared 22.6% to £30.9m as margins improved by 50 basis points to 3.4%.

SSP said it had an “encouraging” pipeline of new contracts going forward. CEO Kate Swann added: “SSP has made further good progress in the first half of 2016 and we continue to deliver our strategic initiatives. Constant currency operating profit was up 28% driven by good like-for-like sales growth in our existing business, new contract openings, which are building our presence across the world, and further operational improvements. I am particularly encouraged by the pace of development in our North America and Asia Pacific operations.

“Looking forward, the second half has started in line with our expectations. Whilst a degree of uncertainty always exists around passenger numbers in the short term, we are well placed to benefit from the structural growth opportunities in our markets and to create further shareholder value.”

SSP’s share price has risen strongly since markets opened on back of the growth and bullish outlook, up 1.7% to 305.1p.

John Menzies chairman Iain Napier has announced he intends to retire from the business after eight years on the board in line with the reduction of his other plc responsibilities. He will step down following the conclusion of the AGM on 20 May. Dermot Jenkinson, currently a non-executive director of the group, will become interim chairman and will run the process to appoint a permanent successor. Jenkinson said: “The board would like to thank Iain for his considerable contribution to the John Menzies business and board over the last eight years. He has marshalled us through significant periods of change over his tenure with great skill and experience. We wish him the very best for the future.”

Underlying group revenues at brewer and pub group Marston’s grew 11.5% to £428.7m in the half-year to 2 April, with underlying profit before tax up 11.8% to £33.1m. The group reported like-for-like sales growth of 3% across its managed and franchised pubs and underlying operating profit growth of 16% in the beer division driven by Thwaites acquisition. CEO Ralph Findlay said: “We are encouraged by our first-half performance and are on track to meet our expectations for the year. In pubs, we have driven our growth by the organic development of pub-restaurants and franchise-style pubs, and more recently through investment in lodges and premium bars, widening our appeal. In brewing, we had an excellent first half year and achieved good growth through our industry-leading brands and service.”

Yesterday in the City

Premier Foods (PFD) shares fell 3.2% to 38p by the end of the day despite rising by more than that amount in early trading after the Mr Kipling and Bisto owner beat analyst expectations. The supplier boosted full-year sales by 0.6% to £771.7m after a better-than-expected sales boost of 1.4% in the fourth quarter. Shares have plunged back down to below 40p after surging past 60p on the back of three offers from US suitor McCormick earlier this year. Premier’s management has faced criticism from investors and the City after turning down the offers, which were a big premium to the share price.

Greencore (GNC) also fell 1.1% today to 382.1p despite reporting an 8.1% increase in first-half revenues to £691.6m driven by double-digit growth in the food-to-go side of the business. The group’s net debt increased by £50.5m in the half to £316m and it also warned that the UK backdrop would remain uncertainty as a result of the supermarket price wars.

Other movers includes PZ Cussons (PZC), up 2.3% to 322.8p, Marks & Spencer (MKS), up 1% to 429.7p, and SSP Group, up 0.8% to 300p ahead of today’s interims.

Fallers included Associated British Foods (ABF), Unilever (ULVR), and Diageo (DGE), down 2.3% to 2,980p, 1.8% to 3,106.5p and 1.8% to 1,856p respectively.

Topics