Profits: Coca Cola Amatil, Myer, Transurban
Coca-Cola Amatil says it made a record net profit in the six months to June, thanks to price rises which helped offset slow consumption growth.
The company said in its interim report yesterday that it aims to increase earnings in the ''high single digit'' range over the remainder of its calendar 2010 financial year.
The company posted net profit in the half year to June 30 of $212.7 million, up 12.1%, a result that saw the company's shares driven nearly 5% in trading after the news was released.
They closed the day at $11.72, up 47c, or 4.2% on the day.
Earnings before interest and tax were up 10% at $373.8 million, while revenue grew by just 4.4% at $2.12 billion, on a 1.8% growth in volume, pointing to the very positive impact of price rises.
To reward shareholders CCL will pay an interim dividend of 20.5c a share, fully franked, up from 18.5c in the first half of 2009.
CEO Terry David said the result was much better than it seemed because the first half of 2009 was very strong for the company (the dry weather prompted higher sales of products, against the wetter and cooler first half of this year in some markets).
He said that to deliver volume growth of 1.8% with faster revenue growth of 5.0% in beverages "was a very good outcome''.
''In the year to date, I am pleased that the strength of our business model in effectively balancing pricing, volume growth and market share has provided the platform to improve our profitability and market position in each of our territories.''
''The significant recent investments made by the Company in capacity, operational capability and cold drink coolers, as well as successful new product and package innovation, continues to distinguish the performance of CCA from its food and beverage peer group,'' Mr Davis said.
Australian EBIT rose 9.6% in the half year on volume growth of 1.5% and revenue growth of 5.5%. New Zealand earnings grew 5%, while in Indonesia earnings grew by over 20% on a local currency basis.
Earnings in CCA's food and services division rose 13.7% as the business reaped the benefit of higher EBIT from the higher margin services business.
CCA's beer brands now hold close to 10% of the premium packaged beer market by both volume and value, the company said.
''Even though consumer confidence may have recently strengthened, consumer spending was subdued in the first half as Australian households dealt with the cumulative effect of material increases in interest rates and utility costs,'' Mr Davis said.
''Assuming a normal summer trading season for Australia and New Zealand, CCA is targeting to achieve high single-digit growth in EBIT for the second half,'' he said.
Coca-Cola Amatil said it will issue a further trading update in November.
Myer Holdings, the country's largest department store chain, felt the chill winds of the retail slowdown in the fourth quarter, like so many of its peers did.
The retailer said yesterday that underlying sales fell 0.9% in the fourth quarter and total sales for the June three months dropped 1.4% to $815.8 million from $828 million a year earlier.
But Myer still expects earnings before interest and tax (EBIT) for the full year of between $265 million and $272 million, ahead of the prospectus and previous guidance of $261 million.
Investors perked up at that news and bid the shares up 4.6% in yesterday's weak market to $3.64, a rise of 16c.
Full-year sales rose 0.7% to $3.28 billion after Myer cut costs and increased sales of its higher-margin private label products.
And excluding a renovation of its nine-floor flagship store in Melbourne, the retailer said sales were up 1.3%.
The company said "womenswear, menswear, childrenswear and furniture were the top performing categories during the year".
"The best performing states were Victoria (excluding Myer Melbourne) and New South Wales."
Myer had forecast sales growth of 1%-2% for the year to July 2010 to around $3.3 billion.
Securities in tollroad operator Transurban Group rose by around 3% in yesterday's weak market after it reported a return to profit for the financial year.
The company reported a rise in full year net profit from the 2009 result which was cut by losses and asset impairment write-downs.
The shares ended up 13c at $4.56, a rise of just over 2.9%.
Transurban says it expects to increase distributions in the current year.
Profit from ordinary activities after tax rose to $59.605 million, while revenue rose 2% to $817.169 million.
Proportional earnings before interest, tax, depreciation and amortisation (EBITDA) rose 13.1% to $629.9 million.
"Growth in proportional EBITDA was fuelled by 6.9% growth in underlying proportional revenue to $842.4 million and the continued emphasis on cost control, which has contributed to further cost reductions during the year.
"Transurban has now delivered total cost savings of $45.3 million since a program to reduce costs was commenced in June 2008.
"This is more than double the original cost reduction target announced at that time.
"On a statutory accounting basis, Transurban reported net profit of $59.6 million, which compares to a loss of $16.1 million in the prior corresponding period." the company said.
Transurban declared a final distribution of 12c per security, unfranked, bringing total distributions for 2009-10 to 24c unfranked.
Transurban said it expected to pay a higher total distributions in 2010-11 of at least 26c, "based on the positive outlook for Transurban" in the year.
Transurban also revealed that chairman David Ryan was stepping down, a move that didn't take the market by surprise.
Commentary this morning suggested he jumped before big shareholders might have pushed him from the board at the AGM.