Foster's toasts rise in profits


Foster's has been expanding its wine business faster than the brewing business that gives the company its name

MELBOURNE, Australia (Reuters) -- Australian beer and wine company Foster's Group said on Tuesday it expected strong growth to continue in 2002/03.

It also reported a 21 percent rise in annual net profit for 2001/02, just over estimates.

"You are going to see rising cash flow with double digit growth in earnings," chief financial officer Trevor O'Hoy told a briefing, adding that this was on a normalized basis.

Foster's chief executive Ted Kunkel said cash flows were expected to rise by 10 percent on a normalized basis in 2002/03.

Kunkel said the company had pursued "smart bolt-on acquisitions" in 2001/02, usually up to A$100 million.

"In wine, the smart bolt-ons will continue," he said, but added that there were no major acquisitions currently in the pipeline.

Slightly ahead of estimates

Foster's earlier reported a net profit for 2001/02 of A$560.9 million ($308 million) for the year ended June 30, up from A$465.2 million.

Its stock is up 0.4 percent to A$4.89 on Tuesday afternoon, at a time the S&P/ASX 200 index is down 0.18 percent.

According to Multex Global Estimates analysts had forecast a net profit before one-off items of A$555.7 million within a range of A$547.2 million to A$573 million.

Its closely watched operating cashflow for the year was A$634.4 million, above A$283.2 million a year ago.

Foster's beer brands include Foster's Lager, Victoria Bitter and Cascade Premium while key wine brands include Wolf Blass, Yellowglen and Beringer.