Heineken posts 9.9 per cent rise in annual earnings

BEER giant Heineken has toasted a 9.9 per cent rise in annual earnings ahead of its takeover of British pub group Punch Taverns.

The Dutch group posted underlying operating profit of €3.54 billion (£3 billion) last year, up from €3.38 billion (£2.9 billion) and said it sold 3 per cent more beer by volume.

It revealed a €1.15 billion hit (£976 million) to revenues from the Brexit-hit pound, as well as currency depreciation in other markets, although turnover still rose by 1.4 per cent to €20.8 billion (£17.7 billion).

The group said it is set for further sales and profit growth over the year ahead, but cautioned over "volatile" economic conditions and is expecting a further currency impact of up to €75 million (£64 million).

Heineken sealed a deal in December to snap up Punch Taverns with private equity firm Patron Capital.

The deal, which values Punch at £402.7 million, will see the Dutch beer giant buy 1,895 pubs and Patron 1,329.

Heineken and Patron fought off a rival bid from the pub chain's co-founder Alan McIntosh with a 180p-per-share offer.

The deal is expected to go through by the end of the first half of 2017.

Heineken said beer sales by volume declined "slightly" in the UK last year, but premium sales saw double-digit growth.

Global sales of Heineken in the premium market rose 3.7 per cent by volume thanks also to double-digit growth across Brazil, South Africa, Mexico and Romania.

It said new cider drinks were well-received in the UK, with double-digit sales growth in the final six months of 2016.

The group saw ongoing strong sales of Strongbow, with good demand for its Strongbow Dark Fruit and Strongbow Cloudy Apple, alongside Old Mout.

Heineken is the world's number two brewer behind Budweiser firm Anheuser-Busch InBev, which sealed its position as the biggest player after its mammoth £79 billion takeover of SABMiller late last year.