POSTIVE MIX HELPS FOSTER’S SHAKE TAKEOVER RUMORS
Foster’s showed strong overall beer and wine sales in its second half despite a strong Australian dollar and bad weather. Combined with the company’s plan to buy back about A$350 million worth of stock, Foster’s saw a 6% jump in shares. Stock has fallen 11% so far this year based on currency concerns and rumors that Foster’s might be a takeover target. However, Foster’s says that while it has been approached by almost all private equity buyers, interest has lessened in recent weeks.
With the Australian glut starting to wane and increased demand in the US, Foster’s is headed for a brighter future. The Australian drinks company is currently focusing on organic growth and not acquisitions, it said, while hoping to drive sales by riding the “trading up” wave to premium beer and wine.
"Growth of international wine was a highlight and reinforces our strategy to become a major global premium wine player," chief Trevor O'Hoy said in a statement.
AMERICAS AND THE US. The Americas had a 12% fall in earnings to A$109.3 million in the second half as profit was cut by the rise in the Australian dollar. Overall wine volume in the Americas was up 5.5% for the fiscal year. In the US, wine volume grew 4.3%.
Sales in the Americas were driven by positive mix in the Lindemans, Chateau St Jean and Stags's Leap labels, coupled with eight of the nine premium Californian brands that sold for more than $10 a bottle. The company also said the re-launched Rosemount brand was off to an “encouraging start.” Positive mix was offset by higher packaging costs in H2.
AMERICAN PRIORITIES. Foster’s outlined several goals that will reportedly take top priority in the Americas in fiscal 2008. For starters, the company plans to review how its products are sold in the U.S. market as it seeks faster growing distributors. We included the rest below:
• Strong wine category momentum
• Strong growth in $10 and above price points
• Improved mix and selective price increases
• Distributor review in key US states
• Sustained wine quality
• Continue new product development momentum
• Varietal extensions
• Mix shift to Californian portfolio
VINTAGE OUTLOOK. Foster’s says the California industry is “in balance,” with the 2007 vintage yields expected to be in line to moderately below longer term averages.
Meanwhile, the 2008 Australian vintage will look similar to 2007, with expected yields below average but above the 2007 vintage.
CFO BIDS ADIEU. Pete Scott, Foster’s cfo, will retire from the company and return to the US, effective at the end of the current fiscal year. An international search has commenced to identify a successor, including both internal and external candidates, said the company.
With the Australian glut starting to wane and increased demand in the US, Foster’s is headed for a brighter future. The Australian drinks company is currently focusing on organic growth and not acquisitions, it said, while hoping to drive sales by riding the “trading up” wave to premium beer and wine.
"Growth of international wine was a highlight and reinforces our strategy to become a major global premium wine player," chief Trevor O'Hoy said in a statement.
AMERICAS AND THE US. The Americas had a 12% fall in earnings to A$109.3 million in the second half as profit was cut by the rise in the Australian dollar. Overall wine volume in the Americas was up 5.5% for the fiscal year. In the US, wine volume grew 4.3%.
Sales in the Americas were driven by positive mix in the Lindemans, Chateau St Jean and Stags's Leap labels, coupled with eight of the nine premium Californian brands that sold for more than $10 a bottle. The company also said the re-launched Rosemount brand was off to an “encouraging start.” Positive mix was offset by higher packaging costs in H2.
AMERICAN PRIORITIES. Foster’s outlined several goals that will reportedly take top priority in the Americas in fiscal 2008. For starters, the company plans to review how its products are sold in the U.S. market as it seeks faster growing distributors. We included the rest below:
• Strong wine category momentum
• Strong growth in $10 and above price points
• Improved mix and selective price increases
• Distributor review in key US states
• Sustained wine quality
• Continue new product development momentum
• Varietal extensions
• Mix shift to Californian portfolio
VINTAGE OUTLOOK. Foster’s says the California industry is “in balance,” with the 2007 vintage yields expected to be in line to moderately below longer term averages.
Meanwhile, the 2008 Australian vintage will look similar to 2007, with expected yields below average but above the 2007 vintage.
CFO BIDS ADIEU. Pete Scott, Foster’s cfo, will retire from the company and return to the US, effective at the end of the current fiscal year. An international search has commenced to identify a successor, including both internal and external candidates, said the company.
posted at 7:51 AM
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