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Tuesday, 5 December, 2000, 11:16 GMT
Kronenbourg boosts S&N
Kronenbourg logo
The UK's biggest brewer, Scottish and Newcastle, has posted an 8% rise in first-half profits, boosted by its acquisition of French beer Kronenbourg and improved pub trading.

S&N's pre-tax profits of 241m for the half year to 29 October were at the bottom end of market expectations of 240-250m, with an interim dividend up 4% at 9.5p a share.

Unlike former brewing rivals Bass and Whitbread, S&N has concentrated solely on pubs and beer, selling its Center Parcs and Pontins holiday camps.

The strategy looks set to pay off on Wednesday, when S&N is expected to be re-admitted to the blue chip FTSE 100 index, after it was ejected in August.

Further acquisitions

S&N chairman Brian Stewart said the profit figures were helped by nearly four months contribution from Kronenbourg - but he declined to give precise details on pub trading.

"There has been a significant improvement during the half year from quarter one to quarter two in a period when there has been considerable churn in the estate with 800 pubs in and 400 out," said Mr Stewart.

After a poor run earlier in the year, S&N shares have recovered since September to outperform the FTSE All Share index and the UK brewing sector by about 20% over the last 12 months.

The brewer makes 28% of the UK's beer with licensed brews Foster's and Miller Pilsner as well as the top selling ale brand John Smith's, plus Kronenbourg.

It showed operating beer profits up nearly 40% as it gained from the acquisition of the French beer company in July.

In a UK beer market down 2.8%, it managed to limit its volume decline to 1.1%.

The company is expected to make further foreign acquistions as it attempts to keep pace with the rapidly consolidating European beer market.

Pub review

It is also carrying out a review of its 2,700 strong pub estate, which is likely to result in the sale of 500 smaller pubs. The result of the review is expected in January.

"We are looking at running a quality pub estate. Clearly we are not going to be running a lot of smaller pubs," Mr Stewart said.

He added that the group was seeing the trading trends it had experienced in the first half continuing into its second half.

On 21 November the company announced it was to sell its Center Parcs leisure business, and subject to clearance from the competition authorities, it expects completion by the end of the calendar year.

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See also:

03 Dec 00 | Business
Byers 'to force Carling sale'
06 Sep 00 | Business
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31 Aug 00 | Business
Pontins returns to man who built it
04 Jul 00 | Business
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20 Mar 00 | Business
UK brewer buys Kronenbourg
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