Coca-Cola Amatil plans revamping programme

Australasian soft drink bottler and distributor Coca Cola Amatil Ltd. (CCA) unveiled a revamp under its new chief in early December, and forecast a 15% jump in 2001 net profit from ongoing business of…

Australasian soft drink bottler and distributor Coca Cola Amatil Ltd. (CCA) unveiled a revamp under its new chief in early December, and forecast a 15% jump in 2001 net profit from ongoing business of A$ 170 million. The presentation, to be delivered by new chief executive Terry Davis and chief financial officer Mike Ihlein, propelled the stock as much as 6% ahead to A$ 5.72. Albert Hung, head of equities at Tower Asset Management, said former chief executive David Kennedy, who stepped down about at the beginning of November, did not make forecasts and Davis“ presentation came as a pleasant surprise as it both included detailed forecasts and exceeded market expectations. Profit from ongoing business excludes A$ 30 million from its problematic Philippines operation, which was sold back to San Miguel Corp., the Philippine food and beverage conglomerate, and to The Coca-Cola Co. The sale, which reduced Atlanta-based Coke“s stake in CCA to 35.4% from 37.5%, was completed in July. The troubled arm has stalled its annual net profit percentage growth in the mid-single digits over the past few years. In the presentation, CCA said it remains on track to post overall net profit of A$ 200 million in calendar 2001. The company said in a statement to the Australian Stock Exchange that, despite individual market issues post-September terrorist attacks, net profit after tax, including the Philippines contribution to April 2001 is still on track for a A$ 200-million result. The forecast is below the year-ago result of A$ 204 million, including an A$ 55.6 million contribution from the Philippines. In the presentation, Davis also targeted ongoing growth in earnings of 10% to 15% a year, earnings per share of 12% to 15% a year and return on capital employed by 1.0% to 1.5%. In 2000, CCA“s earnings totalled A$ 458.4 million and EPS was 19.7 cents a share. Capital expenditure was 5.6% of net sales revenue, within the group“s 5/6% target band and down from 9.3% in 1999.