E-Malt.com News article: Australia: Foster’s beer unit Managing Director resigns due to ill health

Australia’s largest brewer Foster’s announced on December, 22 Alex Stevens, Managing Director of its Australian-Pacific beer business CUB has resigned due to ill health.

“Whilst we are very sorry about this unexpected development, we respect and support this decision and sincerely wish him well for the future,” Foster’s CEO Ian Johnston said.

“In Alex’s short time at Foster’s, a lot has been achieved”, Ian said. “The beer, cider and spirits sales team has been separated from wine, the approved strategy is being implemented, the newly renamed CUB business unit has been relaunched, new product initiatives have been accelerated, the supply chain is being enhanced and new support campaigns launched.”

Until further notice Ian Johnston will act as the Managing Director, CUB, the company said.

According to an analyst, the move is a "distraction" for the division as the group's management faces the challenging task of turning around its underperforming wine business.

Foster's shares weren't hurt by the news. At 0120 GMT, they were up 1.3% at A$5.43 after being under pressure since December, 18 after the company warned currency fluctuations and a weak U.S. market were weighing on the performance of its wine division.

Stevens was appointed managing director of the Australian beer, cider and spirits business in February when the group announced it was structurally separating its beer and wine businesses after failing to sell the struggling wine unit.

Although last week's update focused primarily on wine, Merrill Lynch analyst David Errington said in a research report afterward that the beer business was performing in line with the group's expectations.

Beer's earnings before interest and tax, he noted, should actually benefit from a higher Australian dollar. The analyst upgraded his beer earnings before interest and tax expectations to A$950 million from A$885 million for fiscal 2010, based on the stronger Australian currency.

"The key underlying driver of our bullish view towards Foster's is for beer to generate close to A$1 billion sometime soon," he writes. "We are extremely bullish toward Foster's beer business. We believe that it is one of the best beer assets in the world - ironically, Foster's is probably the worst performing beer stock in the world."

Errington has a buy rating on Foster's.

Another analyst said Stevens' departure shouldn't weigh too heavily on the beverage maker.

"It might be a little bit of a distraction for the beer business," the analyst said. "But given that he was only there (since February) and from what I've been hearing, he's been off the job a little bit anyway, I don't think it's going to be meaningful."


23 December, 2009