SABMiller plays down hopes of World Cup sales boost

BREWING major SABMiller jolted investors yesterday by writing off most of this year for any recovery in consumer spending and it also played down expectations of big volume gains from the football World Cup in South Africa.

• The brewer owns upmarket brands such as Peroni Nastro. Picture: Complimentary

It came as Graham Mackay, chief executive of the world's second-biggest brewer, unveiled solid annual profits growth from Latin America, Africa and China, but admitted trading in eastern Europe was "pretty depressed".

The maker of Peroni, Grolsch and Miller Lite, which gets 85 per cent of its profits from emerging markets, also said it was still affected by a declining beer market in the United States.

Mackay said: "What we are seeing in the world is an uneven recovery, there is slow recovery in emerging markets and this will continue, but it is not particularly strong.

"A broader recovery in consumer spending is not expected before the second half of the current financial year (to March 2011]."

The gloomy statement overshadowed a 12 per cent rise in SABMiller's underlying pre-tax profits to $3.8 billion (2.6bn) and a 17 per cent hike in the full-year dividend to 68 cents in the year to end-March. The company's shares slumped 6 per cent to 1,912p, making the stock one of the FTSE 100's leading fallers.

Investors were also dismayed the group said that although some commodity prices such as barley had fallen, this had been offset by rises in others, such as glass and aluminium.

On next month's World Cup in the firm's home market of South Africa, where it has a 90 per cent market share, Mackay said: "There may be an uptick of 4, 5 or 6 per cent in volumes during the event, which may translate to up to 1 per cent for the year as a whole for South Africa. There may be an uptick elsewhere, but there will not be a dramatic effect to our numbers."

SAB's UK operating arm, Miller Brands, said Peroni Nastro grew volumes just under 30 per cent – equivalent to 23 million extra pints – with Czech beer Pilsner Urquell up 22 per cent. The group said it had deliberately not associated its premium brands with the World Cup. "We are very specific about the consumers that we are trying to attract," Nick Miller, UK managing director, said.

SAB's beer volumes were flat after stripping out the effect of acquisitions, but in the first three months of 2010 they picked up 2 per cent.

• Pitcher & Piano and Tavern Table pubs group Marston's yesterday said it had shrugged off the tough consumer climate to return to revenue and profit growth.

The firm, which also brews ales such as Pedigree and Hobgoblin, edged up underlying profits 0.4 per cent to 27.8 million in the six months to 3 April. Sales over the group's 490 managed pubs rose 1.4 per cent as food sales offset slower drinks trade, while brewing sales climbed 8.6 per cent.