Banks

Barclays: life in the old dog yet

Barclays, a former basket case of British banking, is beginning to look inspiringly mediocre. The bank has failed Bank of England stress tests less resoundingly than Royal Bank of Scotland. Investors believe its assets are worth only 10 per cent less than their book value, judging from the share price. Although Barclays’s legal team have […]

Continue Reading

Currencies, Equities

Scary movie sequel beckons for eurozone markets

Just as horror movies can spook fright nerds more than they expect, so political risk is sparking heightened levels of anxiety among seasoned investors. Investors caught out by Brexit and Donald Trump are making better preparations for political risk in Europe, plotting a route to the exit door if the unfolding story of French, German […]

Continue Reading

Currencies

Dollar rises as markets turn eyes to Opec

European bourses are mirroring a tentative Asia session as the dollar continues to be supported by better US economic data and investors turn their attention to a meeting between Opec members. Sentiment is underpinned by US index futures suggesting the S&P 500 will gain 3 points to 2,207.3 when trading gets under way later in […]

Continue Reading

Banks

Basel Committe fail to sign off on latest bank reform measures

Banking regulators have failed to sign off the latest package of global industry reforms, leaving a question mark hanging over bankers who complain they have faced endlessly evolving regulation since the financial crisis. Policymakers had hoped to agree the contentious new measures at a crunch meeting held in Chile this week, but a senior official […]

Continue Reading

Banks, Financial

Banking app targets millennials who want help budgeting

Graduate debt, rent and high living costs have made it hard for millennials to save for a house, a pension or even a holiday. For Ollie Purdue, a 23-year-old law graduate, this was reason enough to launch Loot, a banking app targeted at tech-dependent 20-somethings who want help to manage their money and avoid falling […]

Continue Reading

Categorized | Equities

AB InBev plans buy-back and dividend rise


Posted on February 26, 2015

Bottles of Budweiser beer sit on ice during a press conference in Moscow, Russia, on Wednesday, May 19, 2010. Anheuser-Busch InBev NV, the world's largest brewer, started selling its Budweiser brand of beer in Russia, the company said in a statement today. Photographer:Alexander Zemlianichenko JR/Bloomberg©Bloomberg

A strong World Cup in markets such as Brazil offset disappointing performance in the US and Europe

Anheuser-Busch InBev focused on returning cash to shareholders in its fourth quarter results as analysts played down expectations of a “transformational” acquisition from the world’s biggest brewer by market capitalisation.

The maker of Budweiser launched a $1bn share buy-back and increased its dividend by nearly 50 per cent even after its fourth-quarter earnings fell short of estimates on Thursday.

    AB InBev is subject to renewed rumours that it is set to buy a rival brewer or soft drinks company. The sector has seen heightened M&A chatter since London-listed rival SABMiller’s attempt to buy Heineken was knocked back by the Dutch group.

    Analysts at Bernstein warned that AB InBev’s focus on organic growth and cash returns made any big M&A deal unlikely over the short term. An acquisition of SABMiller would be “expensive” and “high-risk”, particularly as the Anglo-South African group’s share price is close to a record high, according to Trevor Stirling, analyst at Bernstein.

    Shares in the group initially fell but rallied in late afternoon by 3.1 per cent to €113.60 – an all-time high.

    Overall in 2014, a strong football World Cup in markets such as Brazil helped offset some of the disappointing performance in the US and Europe, where beer sale volumes fell 1.4 per cent and 6.1 per cent respectively.

    The Belgian-listed drinks group, which owns brands ranging from Budweiser to Stella Artois, reported adjusted earnings of $5.07bn for the quarter, up 5.6 per cent year on year, but short of the $5.27bn forecast by analysts.

    AB InBev said that improving the performance in its US market, with a focus on more expensive beer and introducing similar products such as cider, was one of its main priorities. But Felipe Dutra, chief financial officer, said that turning round brands such as Budweiser was “not an easy challenge”.

    Budweiser – which goes back 139 years – has struggled to gain market share among younger drinkers in the US, who are opting for craft beer over mass-market rivals. Sales outside the US account for 60 per cent of the brand’s volumes.

    Investors received better news on the dividend, which AB InBev said would rise to €3 for the whole of 2014 – slightly more than an estimated €2.92 and nearly 50 per cent up on 2013’s dividend.

    Mr Dutra outlined plans to increase the group’s dividend yield to 3-4 per cent from its current level of 2.7 per cent, bringing the brewer into line with other consumer goods groups.

    The share buy-back will go ahead throughout 2015. AB InBev’s shares have rallied by nearly a fifth since the start of 2015 as investors anticipated increased cash returns from the brewer.