Foster's knocks 40% off Courage asset values

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The Independent Online
THE asset values of Courage, the UK's second-largest brewer, and its jointly owned Inntrepreneur pub company have been written down by more than 40 per cent.

Foster's Brewing of Australia, owner of Courage, said the action 'recognised the heightened business risk'.

Foster's, 37.6 per cent owned by Broken Hill Proprietary, also reported an increase in pre-tax profits from Adollars 279m ( pounds 138m) to dollars 308m for the year to June. After abnormal charges and tax, profits fell from Adollars 310m to Adollars 282m.

The UK write-down totalled Adollars 955m ( pounds 455m), of which more than 70 per cent was attributable to Courage. About Adollars 385m related to brand names, Adollars 242m to goodwill and Adollars 58m to fixed assets.

A Adollars 270m write-down on Inntrepreneur was expected after a similar move by Grand Metropolitan, the other joint owner of the pub company.

While UK asset values were cut, the worth of brands in Australia increased by Adollars 665m.

Graeme Willersdorf, group director of public affairs at Foster's, said the UK assets had to be revalued because of the decline in the British beer market and a slower- than-expected economic recovery.

However, he told competitors and broking analysts, who have been predicting that Courage was not strong enough to hold on to its number two position in the beer market, that the company had a range of strategic options. The closure of breweries was not under consideration, although he acknowledged that by the year 2000 the UK would be able to produce more than 25 per cent of predicted consumption.

Courage's breweries performed well, with market share at just over 19 per cent. Sales were steady despite the growth in personal imports.

One looming problem is the loss in 1998 of the sole right to supply beer to thousands of Inntrepreneur pubs.