SABMiller to post improved Q2 sales figures

Traders prepare to focus on SABMiller results after merger and acquisition activity distractions.

Silhouette drinking from SABMiller glass
Source: Bloomberg

On Tuesday 14 October, SABMiller is expected to release its second-quarter results. The markets are expecting the adjusted earnings per share to have increased from $1.216 up to $1.294, backed up by sales figures that are called to jump from $8.518 billion to $13.732 billion. All of this should see the company’s pre-tax profits improve from $2.394 billion up to $2.732 billion.

SABMiller’s last quarter was dominated by the company’s ultimately unsuccessful attempts to acquire Dutch beer brewer Heineken.

Traders are split between thinking this is a preemptive defensive move to ward off any attempts from AB InBev from launching its own bid to acquire SAB, or merely another step in market coverage and company profitability.

The drinks sector, like many, appears to have increased its appetite for expansion and merger and acquisition activity looks likely to materialise. If SABMiller does give up on chasing Heineken, it might be tempted to turn its attention to Molson Coors which would also offer further global expansion and diversification, and help ward off any unwanted advances.

At the height of the M&A story, SABMiller shares were trading as high as £38.56. As this story has cooled the shares have continued drifting back down to £33 level. Considering we are expecting second-quarter figures to improve and the drinks sector looks to have more M&A activity to come, we could reasonably expect support to materialise in this region.

SABMiller chart

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