Lion comes up with a frothy figure

Japanese beer-maker Kirin wants to buy all the stock in Lion Nathan that it does not already own. Photo / Brett Phibbs

Transtasman brewer Lion Nathan has lifted its guidance for full-year net profit after reporting solid results from its beer operations in the first half of its financial year.

Lion Nathan, which is Australia's second-biggest brewer, yesterday released preliminary, unaudited trading results for the six months to March 31, 2009.

"Lion Nathan's solid first-half beer results have enabled a positive revision to the 2009 full-year reported net profit after tax guidance to A$305 million [$393.6 million] to A$315 million (previously A$300 million-A$315 million), which represents 12 per cent to 16 per cent growth on the prior year," the company said.

On Thursday, Lion Nathan said it had been approached by its largest shareholder, Japanese brewer Kirin Holdings, to buy all the stock in the company that it does not already own. Lion Nathan shares are in a trading halt while it holds confidential talks with Kirin.

Lion Nathan last traded at A$8.31.

Kirin already holds 46.13 per cent of Lion Nathan and owns Australian food, juice and dairy products group National Foods.

Lion Nathan said net profit after tax for the first half was up 6.9 per cent to A$176 million.

The company, whose beer brands include XXXX, Tooheys, Boag's, James Squire, Heineken, Beck's and Hahn, said its investment decisions over the past five years had built a stronger business which was positioned to deliver in the 2009 full year and beyond.

"The company expects a higher growth rate in the second half due to innovation momentum, Boag's growth accelerating, the timing of Easter and the cycling of the investment period of the prior year, where fourth-quarter marketing spend and the funding costs relating to the Boag's acquisition had a significant impact on results."

Net sales revenue for the first half grew 5.5 per cent to A$1.18 billion.

The company said it was generating strong cash flows and its funding position remained secure, with no debt maturing in the remainder of the 2009 full year.

Lion Nathan said it achieved very strong results from its Australian operations through growth in core brands, innovation, gains in sales of tap beer and growth in the Boag's brand.

Earnings before interest and tax (Ebit) for Lion Nathan Australia were up 14.8 per cent to A$280.3 million.

Operations in New Zealand were "maintaining position", with Ebit up 3.1 per cent to $56.5 million.

Lion Nathan said its wine operations, which were much smaller than the beer operations, had profitability affected by the economic environment in the US, Britain and Australia. Ebit fell 55.7 per cent to A$3.5 million.

"These first-half results show the resilience of our business, which has delivered another set of robust numbers," Lion Nathan chief executive Rob Murray said.

Murray said the fact that the company was able to exceed its forecasts was even more pleasing given the difficult economic environment.

"The investments we have made have been a key enabler of innovation and have enhanced the equity of our core brands and it has also resulted in a stronger business, better able to navigate tough economic times," he said.

Lion Nathan said the beer market remained buoyant as consumers switched to more expensive and premium brands.

Recent new brands such as Steinlager Pure, Hahn Super Dry, Barefoot Radler, Speight's Summit and Tooheys New White Stag were expected to yield further growth in the second half.

Lion Nathan will release its full, audited half-year results before May 20.

- AAP