Brewer Foster’s Group Ltd
(ASX:FGL) says it has decided to pursue a demerger of its wine and beer assets, spinning them off into a new ASX listed company.
The company also says it expects to recognise a non-cash impairment charge of up to $1.3 billion to the carrying value of its wine assets in the 2010 financial year.
As a result of the impairment, the timing and payment of dividends over the next 12 months is expected to change, the company says.
Foster’s says it expects to report earnings of between $1.05 and $1.08 billion for the year to June 30, 2010, broadly in line with consensus estimates.
CEO Ian Johnston says the company is increasingly seeing the benefits of operationally separating the beer and wine businesses.
Mr Johnston says while the beer and wine businesses are market leaders, they operate in separate market segments with different strategic and operating characteristics.
The benefits of the demerger include increased transparency allowing investors to more appropriately value each business over time and greater investment choice.
Foster’s says no decision has been made on the structure or timing of a demerger, and is unlikely to be implemented until the first half of calendar 2011, at the earliest.
Foster’s Group reported profit of $438.3 million for the year to June 30, 2009.
