Coca-Cola Amatil special dividend after SPC sale

Coca-Cola Amatil will use proceeds from the sale of its SPC business to pay a special dividend to shareholders.

The SPC plant in Shepparton. Picture: Stuart McEvoy

Coca-Cola Amatil says it will use proceeds from the sale of its SPC fruit and vegetable processing business to pay a special dividend to shareholders.

The soft drinks maker reported a net profit of $168.0 million, up 6.3 per cent on a year ago. However, earnings from continuing operations fell by 3.9 per cent to $173.3 million, which management said was in line with its expectations.

Coca-Cola Amatil said it would pay a special dividend of 4 cents per share after raising $40 million proceeds from the sale of SPC. That is on top of an interim dividend of 21 cents a share.

SPC was purchased by Shepparton Partners Collective, a joint venture between investment firms Perma Funds Management and the Eights. The deal completed on June 28.

Coca-Cola Amatil, which has been struggling with weaker consumer demand for its staple carbonated sugary beverages, had in recent years invested $78 million in the SPC unit. The Victorian government also invested $22 million.

Coca-Cola Amatil chief executive Alison Watkins said the results were a solid performance for the beverage group, with top-line revenue growth reflecting the impact of business initiatives across each market.

The New Zealand, Papua New Guinea and alcohol and coffee businesses all performed well, in line with expectations, she said.

“The end of 2019 will mark the completion of our two-year transition period,” Ms Watkins said.

“We’ve set ourselves the target of a return to mid-single digit EPS growth from 2020. While there’s more to be done, these results show good progress towards that goal.

“In particular, the accelerated Australian growth plan and Indonesia’s accelerate to transform plan are delivering volume and route-to-market improvements in these major markets.

“We look forward to seeing the further benefit of the rollout of these strategies in the second half of 2019.”

Ms Watkins said the Australian beverages business – which delivers around two thirds of earnings, had again delivered volume growth in diet and no-sugar colas, alongside double-digit growth in energy and dairy.

While overall volumes declined by 1.2 per cent, Ms Watkins said this was largely driven by the container refund scheme in Queensland, where net volumes fell by 3.8 per cent. Excluding Queensland, Australian beverages volumes declined by 0.3 per cent for the half.

“The continued volume growth in diet and no-sugar Coca-Cola is a testament to consumer enthusiasm for healthier options, and a sign of the strength of our portfolio,” Ms Watkins said.

“We’ve heard the message on consumer wellbeing, and we’re delivering with reductions in sugar content across the portfolio of sales.”

With Dow Jones