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REPORTING SEASON: Coca Cola Amatil Ltd (CCL)

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Figure 1: Coca Cola Amatil Ltd 12 month chart

 

Coca-Cola Amatil (CCL) has more than tripled its annual profit

 Coca-Cola Amatil (CCL) posted a weaker than expected full-year profit of $272.1m for the 12 months ended 31 December 2014.

 Earnings were held back by more significant than expected restructuring charges of $103.4m. Note that the more than tripling in NPAT in FY14 came as a result of substantial write-downs of $404m linked to the SPC Ardmona fruit-processing business in the previous year which held back FY13 earnings.

 While revenue in Australia (its main market) worsened, income generated in Indonesia and New Zealand picked up. A rise in cost inflation and currency depreciation in Indonesia made a dent in earnings despite revenue gains.

 CCL will pay eligible shareholders a $0.22/share final dividend franked at 75% on 7 April 2015. This represents an 87% payout ratio.

 Looking ahead, CCL aims to continue rebuilding the brand with particular focus on “better for you” products in Australia and is progressively implementing “cost initiatives”. CCL will continue expanding market presence in Indonesia. CCL targets a return to mid single-digit growth in earnings per share over the next few years.

 

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Steven Daghlian, Market Analyst,