Coca Cola Amatil reports 15 per cent decline in first half, SPC sales up 10 per cent

MAYBE consumers do care about saving Aussie companies. SPC Ardmona has reported a huge increase in sales since it revealed it was struggling.

SPC Ardmona has also secured a deal to supply to Woolworths.

MAYBE consumers do care after all. After Coca Cola Amatil (CCA) revealed its canned food division SPC Ardmona was struggling and would need government support, Australians heeded the plea.

The company said SPC’s sales had lifted 10 per cent in the quarter due to strong customer support after news broke of its troubles.

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But it wasn’t all good news for CCA.

CCA has flagged a 15 per cent decline in its first half earnings due to weakness in its Australian operations and increasing cost pressures in Indonesia. New chief executive Alison Watkins said CCA had started a strategic review of the company's operations to look at ways to drive growth, boost productivity and cut costs.

“Over the next few months, we will challenge and review our business plans and strategies across the group to drive growth and value while targeting a step-change in our fixed costs and productivity,” she said.

CCA now expects its earnings for the first six months of 2014 to be around 15 per cent less than the $374 million in earnings before interest and tax (before significant items) the company recorded for the same period a year ago.

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Ms Watkins said CCA's Australian beverages business had suffered due to discounting from competitors and soft sales.

“The grocery channel continues to be challenging with aggressive pricing activity which has limited CCA's ability to recover cost increases while consumer demand in the non-grocery channel has been soft in the first quarter and there has been a mix shift to lower margin customers,” she said.

Ms Watkins said sales volumes from the company's Indonesian business were up 10 per cent for the quarter but that was offset by a 20 per cent slide in the value of the rupiah, the country's currency, and higher wages and fuel costs.