Sluggish economy puts pressure on SABMiller

BREWER SABMiller will report a slowdown in sales growth for its year to March, when it presents its results next Thursday, judging by its recent trading updates.

SABMiller warned in a recent trading update that the depreciation of emerging market currencies against the dollar would weigh down its earnings. Its sales for the year were up 3% on a constant currency basis, with fourth quarter revenue up only 2%.

But Ashburton Investments portfolio manager Mathew Baker said last week this "should be offset somewhat for the South African investor when the earnings are converted into rands".

He expected earnings growth from South Africa "will be driven by an increase in margin as consumers continue to move to premium beers, even in an environment where the consumer is coming under pressure", Mr Baker said.

SABMiller CE Alan Clark said last month the group had delivered top-line growth for the year "despite a number of headwinds and a challenging fourth quarter". In the prior year, it managed to grow revenue 7% on a constant currency basis and 10% at a reported level.

SABMiller’s Africa division grew sales a more moderate 5% for the year to March compared with 18% in the previous year.

Meanwhile, South Africa was the company’s fastest-growing region by sales in the 12 months to March, with beverages revenue up 6% for the year.


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