SABMiller reviews Tsogo Sun stake

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SABMiller reviews Tsogo Sun stake

“This investment is not considered to be core to the beverage operations of SABMiller and therefore SABMiller is reviewing its strategic options for its shareholding. However, there can be no certainty that the review will result in SABMiller taking any action,” the global brewing and beverage company said.

Tsogo Sun responded by saying that it would assist SABMiller with its review and that further announcements would be made to shareholders in due course.

SABMiller, which valued its shareholding in [DATA TSH:Tsogo Sun Holdings] at 10.9 billion rand, also announced the group’s financial performance, which, it believes, is in line with expectations.

Group net producer revenue (NPR) for the 12 months ending 31 March 2014 grew by three per cent while fourth quarter group NPR grew by two per cent, both on an organic, constant currency basis.

(READ MORE: SABMiller sees Q3 net producer revenue growth)

Total beverage volumes for the full year rose by two per cent with lager volumes increasing by one per cent and soft drinks volumes increasing by five per cent.

“We continued to deliver top line growth for the year, despite a number of headwinds and a challenging fourth quarter,” said [DATA SAB:SABMiller] chief executive, Alan Clark.

“The combination of our global overview and deep local insights enables us to fine tune our operations in each market, and to deliver commercial progress, which underpins our confidence in our ability to deliver higher revenue growth in the longer term.”

The company also reported moderate growth in Africa, given the more challenging fourth quarter with group NPR for the full year ending five per cent ahead of the previous year.

“In Tanzania, lager volumes grew by four per cent for the full year. Zambia encountered a challenging fourth quarter due to the excise-related pricing taken in January 2014, limiting full year lager volume growth to six per cent. Political tensions in Mozambique continued to impact demand, and lager volumes ended down two per cent for the year,” SABMiller said.

“Nigeria and Ghana delivered strong double digit volume growth in spite of economic challenges. In Uganda, full year lager volumes declined three per cent although there was an improvement in the fourth quarter. Soft economic conditions persisted in Zimbabwe. Our associate Castel delivered lager volume growth, driven principally by a strong performance in Angola.”

(READ MORE: SABMiller S.Africa chairman steps down)

South Africa experienced NPR growth in an increasingly challenging trading environment. The beverages group’s NPR grew by six per cent for the full year, which benefited from price increases and positive lager brand mix. Lager volumes were level with the prior year.

According to recent reports SABMiller plans to cut at least 400 jobs at Amalgamated Beverage Industries (ABI) – the unit at the brewing and beverage company responsible for the bottling of soft-drinks in South Africa.

The Food and Allied Workers Union, which represents some of the workers at ABI, has reportedly called an urgent meeting with ABI regarding the cuts.