SABMiller share price falls as company misses sales estimates

on Jul 23, 2015
Updated: Oct 21, 2019

SABMiller Plc (LON:SAB) today posted its trading update for the first quarter of its financial year, which showed that the brewer had seen growth in net producer revenue (NPR) during the period. However, weaknesses in Europe and China weighed on the company’s results, which missed analysts expectations.

SABMiller said that first-quarter NPR grew by three percent, while beverage volumes were flat from a year earlier. The median analyst forecast had been for 3.8-percent NPR growth. The company added that beer volumes were down one percent in the quarter, offsetting a four-percent volume growth in soft drink.
“Performance has been slightly worse than already muted expectations,” Bloomberg quoted Eddy Hargreaves, an analyst at Canaccord Genuity, as commenting.

While Europe and Asia Pacific showed weaker results, the Latin America and Africa regions continued to perform strongly. Latin America posted a six-percent NPR gain and beverage volume growth of five percent in the quarter, led by Columbia, where the group NPR grew by 10 percent with beverage volumes up nine percent. In Africa, the company saw a seven-percent increase in NPR and four-percent increase in beverage volume.
SABMiller’s chief executive officer, Alan Clark, commented on the performance: “Both revenue and volumes grew strongly in Latin America and Africa in the quarter, tempered in particular by a challenging quarter in our key European markets where the trading environment remains difficult and softer volumes in China.” He added: “We continue to make good progress in our strategy of driving top line growth which is reflected in the growth of revenue per hectolitre across our regions.”
In today’s trading, SABMiller shares were down 0.7 percent at 3,416.00p, as of 14:52 BST. The stock has risen 1.6 percent since the start of the year and the company’s market valuation currently stands at £53.9 billion.
As of 21 July, 2015, the consensus forecast amongst 36 polled investment analysts covering SABMiller had it that investors should hold their position in the company. The same consensus estimate has been maintained since 18 April, 2014, when the sentiment of investment analysts deteriorated from “outperform”.
As of 15:51 BST, Thursday, 23 July, SABMiller plc share price is 3,417.50p.

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