E-Malt.com News article: Australia: Lion Nathan is to raise its stake in Little World Beverages 33.9% after the IPO

Little World Beverages (LWB), brewers of Western Australian boutique beer Little Creatures, is raising A$21.5 million (US$16.3 million) in an initial public offering (IPO) before listing on the Australian Stock Exchange, The Australian News posted on October 6.

The cash will be used to increase brewing capacity at the company's 2 million-litre Fremantle plant and move packaging operations outside the brewery as the company ramps up a marketing push into the eastern states which had been hampered by capacity constraints during 2004. The money will also partly fund the establishment of a new A$23 million brewery planned to be built in the next three to five years to supply expected sales growth.

Major shareholder Lion Nathan will increase its stake in the Perth-based company to 33.9 per cent after the IPO, up from 26 per cent at present.

LWB said the funds would be used to increase production capacity at the existing Fremantle brewery and build a new WA brewery to meet longer term requirements. It also hopes to increase its presence in the eastern states with broader sales representation.

The public offer, which opens on October 12, is for 11.25 million shares at $1 each. The company is forecasting a net profit of $2.63 million for 2005-06, up 10 per cent from the previous financial year, on $20.8 million in sales, up 32 per cent.

Chief executive Jason Marinko said the brewer had managed to continue developing sales in a declining beer market, riding the trend towards premium beers, where sales had grown by 10 per cent over the 12 months to the end of June.

Beer volumes were expected to increase by about 45 per cent this financial year, in line with 2004-05, as the company pushed for a larger market share in the eastern states, which accounted for just 25 per cent of sales in the past financial year.

However, Mr Marinko said this had been achieved with minimal marketing effort from the company, and he was hoping for a much stronger response following the recent appointment of dedicated sales teams in Victoria and NSW. Little World will have a market capitalisation of $59 million before listing on November 14.


07 October, 2005