SAB Miller says profits flat on strong dollar

Jessica Morris
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Peroni maker SAB Miller said full-year profit remained flat (Source: Getty)

The figures

One of the world's largest brewers, SAB Miller, said full-year revenue rose six per cent to £ in the year to the end of March, minus the effects of adverse exchange rate movements. However on a reported basis, it fell by two per cent. Meanwhile, pre-tax profit was flat at $4.83bn, compared with $4.823bn a year earlier.

The news sent shares up 1.8 per cent to 3,564.5p.

Why it's interesting

SAB Miller has been increasing its focus on Africa in a bid to offset the negative impact of a strong dollar. Net producer revenue on the continent - a sales measure that excludes excise taxes - grew nine per cent, reflecting lager share gains.

And the maker of Peroni and Grolsch has said also it's targeting women and wine drinkers through its new strategy. It wants to appeal to mature markets, as well as the growing demand for beer “outside its traditional role as the favourite drink for men in pubs and bars”.

Its recent takeover offer was spurned by smaller, independent rival Heineken, a deal that would have helped to protect it from a takeover bid from AB inBev. Nevertheless, the offer from its rival, in September, pushed up SAB Miller's shares.

What SABMiller said

Alan Clark, chief executive of SABMiller, said a strengthening dollar had a negative impact on the reported results. Despite this, "topline revenue growth remained strong in the face of industry headwinds which kept lager volumes in line with last year."

Additionally the brewer said it expects the trading environment to "remain challenging" and the business to continue being hit by adverse exchange rate movements. Nevertheless "we are confident in our strategy to drive superior long-term growth and we will continue to invest in production capacity and capability, particularly in growth markets".

In short

SAB Miller has been hurt by a strong dollar - nevertheless, its plans to focus on growth in emerging markets where it already has an established footprint as well as catering for a wider demographic of beer drinkers should help to drive up revenues.

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