S&N toasts earnings

July 3, 2001 Posted: 1411 GMT

LONDON (CNN) -- Europe's No. 2 brewer Scottish & Newcastle on Tuesday posted a 4.6 percent rise in full-year earnings as it refocused its business.

Scottish & Newcastle, second in the region only to Dutch brewer Heineken, said full-year pretax profits before items to April 29 rose to an expected £427.5 million ($605 million) compared with £408.6 million the previous year.

S&N, which has been shedding its leisure business to focus on its core brewing unit, said turnover jumped 22 percent to £4.35 billion from £3.58 billion previously.

Last year it acquired Kronenbourg beer from France's Danone for £1.7 billion deal and also sold the Center Parcs and Pontin's holiday resorts and 646 pubs.

Analysts had forecast S&N profits of between £420 million and £430 million before tax and one-time items. Net income edged down 1 percent to £308.8 million from £312 million. Earnings per share dropped 4.4 percent to 48.2 pence from 50.4 pence.

Pubs in Britain tend to be managed directly by breweries such as S&N, or leased to tenants who guarantee to buy a certain amount of beer from the brewery.

S&N, whose beers include John Smith's, McEwan's, Newcastle Brown, Theakston's, and Foster's lager which it sells under licence, said it was upbeat on future beer sales despite problems early in the year.

The company, which has 1,450 pubs, said its beer sales fell 0.6 percent, against an overall 2.6 percent fall in the industry.

This was caused by extremely bad weather and foot-and-mouth disease that hit UK agriculture and made many pubs out-of-bounds because of restrictions on movements in the countryside.

"Performance in the early weeks of the new year has done nothing to dampen our confidence that we can meet shareholders' expectations this year and further into the future" said Chairman Brian Stewart.

S&N (SCTN) shares closed down 0.72 percent at 549 pence in London on Monday.

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