New Zealand beer maker, DB Breweries Ltd., announced a 12.5 % increase in its September year net profit on November 4 and said it expected a similar sized increase in the current year. The company posted an annual net profit to $25.38 million against last year's $22.56 million.

It lifted its final dividend to 20.5 cents per share from 14.5 cents per share a year ago and the year's fully imputed 33.5 cents/share payout equated to 67 per cent of net profit. Outgoing chairman David Sadler told shareholders at the annual meeting in February that the company would consider hiking the payout as DB's capital expenditure requirements would be modest now that the $60 million upgrade at its Otahuhu, Auckland brewery was completed.

However, managing director Brian Blake said today when asked about prospects for a higher dividend that the company was "focused on growing the business by reinvesting back in the business". DB and rival Lion Nathan had recently focused heavily on the high margin premium beer market possibly at the expense of other markets.

DB plans to work with pub owners to build more themed bars based on its leading brands – Heineken, Monteiths and Tui – all of which experienced double digit sales growth in the year.

"We think there are quite of opportunities in the market, particularly on-premise and particularly with themed bars," Mr Blake said.
National beer sales rose between 1-2 per cent last year and DB's market share rose half a percentage point to 35 per cent.
In terms of value, Mr Blake said one only had to look at DB's 10.7 per cent rise in sales to $318 million to see the answer to that.
The revamp of Waitemata brewery was not about cost savings, although it had helped deliver higher profits, he said.
"It was focused on how do we make the organisation more effective in terms of working from the customer back.
"We flattened our structured and realigned some of our processes."
Mr Blake said that three years ago when DB decided to become a pure New Zealand-based beer company, quitting wine and peripheral operations, sceptics doubted it could grow profits.
But in the last three years DB, 76 per cent-owned by Singapore-based Asia Pacific Breweries, which in turn is 42.5 %-owned by Dutch brewer Heineken NV and 38 % by Singapore-owned soft drinks group Fraser & Neave, has posted an 86 per cent return against the NZSX-40's average of 35 per cent.

The company's aim was to achieve double digit growth on a long-term basis and Mr Blake saw no reason why that could not be achieved in 2003/4.
Heineken sales, were running very strongly, thanks to the profile of the Rugby World Cup, where the international brewer is a major sponsor.

07 November, 2003