S&N trying to brew a European stategy

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The Independent Online

Scottish & Newcastle, Britain's biggest brewer, will continue to look for opportunities in Europe to grow its international beer business as part of a two-tier strategy of focusing on brewing and retail.

Scottish & Newcastle, Britain's biggest brewer, will continue to look for opportunities in Europe to grow its international beer business as part of a two-tier strategy of focusing on brewing and retail.

The brewer, which has pared down its business in the past 12 months to concentrate on international beer and a select UK pub business, yesterday reported a 4.6 per cent increase in pre-tax profits before exceptionals to £427.5m for the year ended 29 April, on sales up 22 per cent at £4.35bn. This was in line with expectations.

The exceptional charges were from restructuring costs, which totalled £683m. This included £458m concerning the group's disposal of Center Parcs and its Pontin leisure business. Of this, £160m was for the writing back of goodwill that had been written off.

Brian Stewart, chairman of S&N, dismissed City concerns that the brewer should dispose of its remaining 1,430 managed pubs. "Our retained estate is a good business, why would we want to dispose of it?" he asked.

He said the group had enough money to buy acquisitions in Europe without further disposals. Last year it bought Danone's Kronenbourg and Kanterbrau brands and launched a joint venture with Centralcer of Portugal.

The brewer said rainy UK weather and foot-and-mouth had caused beer sales to fall 0.9 per cent from last year to £1.97bn and volumes to slip 0.6 per cent. The national beer market fell 2.6 per cent. In France, Kronenbourg's volumes fell 2.5 per cent. Its shares fell 3p to 547p.

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