CCA share rise in the can

Coca-Cola Amatil business review pays dividends

COCA-COLA Amatil shares have surged to a 16-month high after the beverages giant said it might sell its SPC fruit and vegetable canning business and it showed a lift in profit at its half-year results.

CCA group managing director Alison Watkins announced a review of SPC yesterday, saying a sale, partnership or merger are among options to be considered.

“We believe there are many opportunities for growth in SPC, including new products and markets, further efficiency improvements, and technology Close Change and intellectual property,” Ms Watkins (pictured) said in a statement.

She said the group saw a positive future for the Victorian business. “Importantly, there are no plans to close SPC,” she said.

CCA’s review of SPC won initial support from workers, with the union for SPC workers saying it is open to talks on options for the future of the operation.

Australian Manufacturing Workers Union’s Jason Hefford said employees would engage in “open dialogue” with the company to expand the business and secure its future.

CCA lifted half-year net profit by 12.8 per cent to $158.1 million, up from $140.1 million a year ago.

In its major Australian beverages division, CCA suffered a 3.6 per cent drop in earnings as a result of lower sales volumes.

Driving the fall was a 0.5 per cent drop to 97.3 million cases of sparkling beverages sold.

Volumes were hit by the NSW container deposit scheme, which began in December and cut NSW sales by 1.6 per cent, while there was an increase in volumes outside of NSW of 0.3 per cent.

CCA said it has accrued $10 million in unredeemed deposits from the scheme, which will be returning to NSW consumers through cutting prices of its products.

The beverage maker and bottler increased its volumes sold of water in Australia by 1.8 per cent to 39.6 million unit cases.

In the second-largest market, comprising Indonesia and PNG, trading revenue fell eight per cent to $487.8 million from a year earlier.

CCA had double-digit earnings growth in its New Zealand and Fiji market as well as its coffee and alcohol business.

Revenue was up seven per cent to $280.2 million in Fiji and NZ, while alcohol and coffee revenue was up 8.7 per cent to $270 million.

CCA shares closed at $9.86, up 3.57 per cent, and it announced a partially franked interim dividend of 21 cents, unchanged from a year ago.