Consumer shift to premium brands spurs Lion Nathan to record profit
Premium alcoholic beverages company, Lion Nathan, has posted strong profit figures despite adverse weather conditions, increasing commodity prices and higher fuel costs.
Their operating net profit after tax (NPAT) increased by 7.0% to $167.7 million for the six months to 31 March 2008, with sales rises of 7.9% attributed to their successful attempts to get drinkers to shift to higher equity national and premium brands.
“The strong revenue growth reflects successful brand investment and new product development in our core businesses,” Lion Nathan CEO Rob Murray said. “We have continued to make a very significant investment in our power brand portfolio and we are seeing very strong revenue growth as a consequence. This is a very robust Australian result despite poor weather and continued cost pressures from commodity and raw material inputs.”
Lion Nathan, who control the Hahn, Tooheys and Beck’s brands in Australia, purchased Boag’s earlier this year and the streamlining of Boag’s operations into Lion Nathan’s existing business has been a success. “The Boag’s integration is ahead of schedule and we are confident that the addition of Boag’s will drive further momentum in our Australian business in the coming years,” Mr Murray said.
Upgrades to the Tooheys and Castlemaine Perkins breweries are reportedly progressing well and the work on a new NZ$250 million brewery in Auckland has commenced. Lion Nathan is expecting these brewery investments to pay dividends in the future. “These investments will help Lion Nathan maintain low cost, efficient operations with increased flexibility, agility and quality standards to meet the evolving needs of our customers and consumers. It will also further improve health and safety standards and the environmental footprint of our breweries,” Mr Murray concluded.