More Beer, Better Outlook For United Malt

By Eva Brocklehurst

Demand for beer as summer beckons in the northern hemisphere is expected to lead to a rebound in brewing and allow United Malt Group ((UMG)) to experience a recovery in volumes into FY22.

Vaccination rates in the US and UK are encouraging and weather patterns are expected to support greater demand for beer. Management expects volumes will remain below pre-pandemic levels for the rest of FY21, although since March, volumes have been tracking at around 95% of pre-pandemic levels. Stronger volumes in March also meant first half results were well ahead of guidance.

In the US, consumers appear to be returning to licensed premises for liquor consumption, which supports the company’s business, and attendance at summer sport and entertainment is likely to provide more upside.

As a cautionary note Macquarie points out Canada has entered a third wave of coronavirus and exports are likely to be affected by the potential for still-high coronavirus infection rates and lockdowns in Asia.

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