Numis highlights SABMiller as "industry consolidation target" after Q4 impresses

LONDON (ShareCast) - SABMiller (Xetra: BRW1.DE - news) impressed the market with a pick-up in sales growth in its fourth quarter, prompting Numis Securities to maintain a 'buy' rating on the brewing titan. However, the broker said its positive stance on the stock is "predicated on the view that SABMiller is an industry consolidation target".

The Miller Lite, Peroni and Grolsch maker reported net producer revenue (NPR) growth of 6% for the three months to 31 March, accelerating from the 4% growth seen in the third quarter.

Numis said sales growth was a "little ahead" of its forecasts.

"Whilst it was a strong Q4 in Latin America, with group NPR growing 8%, the company does warn of 'a backdrop of increased competition and difficult trading conditions'," the broker said.

"This is a key market for SABMiller and there are some concerns about the outlook." Nevertheless, African performed well with NPR jumping 12%, while Asia Pacific returned to growth of 7% as China improved, though Asia remains difficult. North American NPR declined 1% while Europe was flat.

Numis kept a 4,100p target price for SABMiller's shares, which were up 1.9% at 3,653p by 10:24.