SABMiller plc’s Strong Perfomance In Emerging Markets Leads To Revenue Increase

SABMiller plc (LON: SAB) rides a wave of success in emerging markets.

Mark Stones

Mark Stones (TMFMumbojumbones) joined The Motley Fool in 2014 and initially worked as a writer for Fool.co.uk, before joining the Fool’s analyst programme. Mark earned a BA in English from Loughborough University. Although he spends more time reading annual reports than Russian literature these days, he still appreciates a novelist’s antipathy toward the accepted view, which is a useful attitude when trying to sniff out hidden gems on the stock market. His approach to investing has been largely influenced by the principles of Warren Buffett and Peter Lynch. He also takes a special interest in the work of healthcare companies. Outside of investing, Mark plays guitar, enjoys good writing and has a guilty passion for combat sports.

Published 21 January, 2014 11:58 am GMT

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The shares of SABMiller (LSE: SAB) (NASDAQOTH: SBMRY.US) fell 1.87% to 3037p this morning, which follows its interim management statement for the group’s third quarter ended 31 December 2013. In the trading update it was revealed that net producer revenue is up 4%.

The brewer is expanding globally, with a focus on doing business in emerging markets, where new consumers are targeted for its affordable products. Many of the company’s 200 brands are market specific with consumers having strong brand loyalty to to the likes of Grolsch and Castle.

Total beverage volumes grew by 2%. Larger volumes were up 1% and soft drinks volumes increased by 7%.

The chief executive commented that:

“The combination of pricing and volume growth, particularly in Africa, Latin America and China, supported net producer revenue growth of four percent. This was in spite of continued weakness in consumer sentiment, which particularly impacted our European and North American businesses.”

SABMiller is a company with a premium valuation and has a forward P/E rating of a little over 18, which we could see compressed in the years to come.

SABMiller doesn’t have a high dividend yield at 1.94%, but this payment can be seen as reliable, and looks set to be lifted over the next few years. If you’d like to grow your money steadily then this is a key consideration.