KUALA LUMPUR: Fraser & Neave Holdings Bhd (F&N) is "comfortable" growing a high single-digit in topline and profits for the financial year ending Sept 30 (FY11), says chief executive officer Datuk Ng Jui Sia.

"We will have no problem growing at a high single-digit. We always outperform shareholders' expectations.

"The prospects are still favourable but the only concerns are raw materials and currencies. We will continue to manage operational efficiency; (being) efficient in buying raw materials and currency hedging," he said at a briefing yesterday.

Chief financial officer Joseph Tan said the high single-digit growth was not a slowdown in growth but due to F&N's large revenue base. He said a 10% growth in revenue would be some RM370mil.

Over the last five years, F&N has grown at a compounded annual growth rate (CAGR) of 22.2% in revenue and 23.4% in profit before interest and tax (PBIT).

Ng said the concern was whether F&N could sustain the growth given its record FY10 in terms of revenue and earnings.

Ng said F&N was exploring the soft drinks market in Thailand, Brunei and Singapore through franchising and would continue to launch new products and variants.       "We are looking for opportunities to create new franchises. We expect sustainable growth for exports and regional expansion," he said.

For FY10, F&N's net profit more than tripled to RM695.3mil against RM224.4milin FY09. Its revenue rose 11.2% to RM3.64bil. The food and beverage company recommended a final single tier dividend of 38 sen per share. F&N topped the gainers' list yesterday, appreciating RM1.08 to RM15.70 on news of its bumper dividend.

It also announced a special interim dividend of RM1.10 per share, thanks to the divestment of the glass container business. This special interim dividend totalling RM393mil will be paid on Jan 6, effectively distributing the entire gain from the divestment.

Ng said the group would return all the gains made from the divestment to its shareholders. "Whatever you don't need, you return. We've done the first act by distributing cash to shareholders," he said.

He added that F&N had earmarked for capital expansion in FY11 some RM400mil, of which RM300mil would be allocated for its Pulau Indah plant expansion.

As at Sept 30, the group had a net cash of RM639mil.

Tan said the RM350mil plant in Pulau Indah was expected to be ready in mid-2011. The full relocation of its existing dairies production in Petaling Jaya's Section 13 could take up to six months and the extra production capacity would probably be fully reflected from FY12 onwards.

For FY10, F&N's local dairies division produced 12 million cartons of milk and contributed RM1.1bil (30%) to total revenue. Soft drinks remained the largest revenue contributor with RM1.58bil (44%).

Ng said F&N would be able to maintain the current level of margin due to its ability to harness economies of scale. In FY10, F&N's PBIT margin stood at 10.7%. It was 9% in FY09.

- The Star Online