SABMiller boosts dividend by 9%

SABMiller, the world's second biggest brewer by sales, has boosted its final dividend by 9 per cent as growth in Latin America and Africa made up for a sluggish performance in more mature markets.

The company, whose beers include Miller Lite, Grolsch and Peroni, reported flat full-year profits weighed down by the strength of the dollar but pointed to "positive momentum" in sales and margins.

"We have delivered a strong set of results, with positive momentum on a whole range of measures, net producer revenue, profit margin, earnings per share and cash flow, allowing us to boost the dividend significantly," said Alan Clark, chief executive, on Wednesday.

Group net producer revenue, a measure of sales that excludes excise, rose 5 per cent to $26.29bn, but fell 2 per cent on a reported basis, with flat beer volumes highlighting the challenge brewers face from stagnant markets in the US, Europe and Asia and a slowdown in emerging countries.

Mr Clark warned that the economic outlook in mature markets was still weak but said that he was confident about growth in Latin America and Africa, which account for around two-thirds of the company's operating profits. He added that in China lager volumes bounced back in the final quarter.

His confidence comes despite SABMiller's exposure to Brazil, which economists estimate to have fallen into recession in the first quarter, with the falling real and the Petrobras graft case exacerbating its economic woes.

Shares rose 1.6 per cent to £35.60 in early trading in London as the brewer said it would increase its final dividend by 9 per cent to 87 cents, bringing the total dividend to 113 cents, up 8 per cent.

Last week, shares jumped on rumours that rival Anheuser-Busch InBev, the world's largest brewer, was preparing a bid for SABMiller, which itself had made an unsuccessful approach to buy Heineken last year.

Mr Clark declined to comment on the rumours. "We had a good year and we're confident of our strategy going forward and that's where our focus is and should be," he said.

Sales of soft drinks, which are less profitable than beer and account for just over a fifth of SABMiller's sales volumes, continued a trend of rapid growth, with volumes rising 8 per cent to 70.3m hectolitres.

Last year SABMiller, which is listed in London and in Johannesburg, agreed a tie-up with Coca Cola to create the soft drink company's biggest bottler in Africa.

Pre-tax profits were flat at $4.83bn, excluding exceptional costs, with adjusted earnings per share down 1 per cent to 239.1 cents, slightly ahead of analysts' expectations of 237.1 cents.

SABMiller, which operates in 80 countries around the world, said that it had achieved savings of $221m for the full year, and was on track to meet a target of $500m by 2018.

Raw material costs are expected to rise in the low single digits in the coming year, the company added.

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