Foster’s on Tuesday said it planned to buy back up to A$350m (US$288m) of its shares as Australia’s largest beer and wine group reported a 17 per cent fall in full-year profits to A$966m.
However, Foster’s said that, after stripping out exceptional items, underlying profits rose close to 17 per cent to A$716m, its third consecutive year of double-digit growth.
Foster’s, which reported weak first-half figures, has restructured its business based on geographic region rather than dividing itself between wine and beer.
Trevor O’Hoy, chief executive, said there was still room for improvement with the group “running on five cylinders out of eight”.
“We are still not running at the optimum level with the businesses on our books and the focus is on organic opportunities in our three regions [Australia, Asia, and the Pacific; the Americas; and Europe, Middle East, Africa].”
He said that nearly all the big private equity firms had been in contact regarding possible transactions with Foster’s but, in a reference to tough conditions in the global credit markets, he added “the calls stopped six weeks ago”.
He suggested the tables had turned as private equity groups might now be looking to shed over-geared businesses.
However, he said Foster’s was not looking to be an aggressive acquirer of assets.
He denied that Foster’s had paid too much for Southcorp, the wine group it bought in 2005 for A$3.2bn.
Foster’s products include wine brands Penfolds, Rosemount and Lindemans and beer including Victoria Bitter, Crown Lager and Foster’s Lager,
Mr O’Hoy said the outlook for the group had improved after a difficult first half.
Sales rose just under 5 per cent to A$4.76bn.