Coca-Cola Amatil Ltd loses Domino’s contract
Shares of Coca-Cola Amatil (ASX: CCL) have fallen 3.4%, after Domino’s has cancelled its contract in favor of Pepsi as its soft drink supplier. As per few media reports, CCL is losing a supply contract with Australian pizza giant Domino’s Pizza Enterprises Ltd (ASX: DPM) and Domino’s will switch to Pepsi from September 2017. Recently, CCL has signed agreements with Charter Hall for the sale and leaseback of its Richlands manufacturing and warehousing facility in Queensland. The sale will settle on 1 December 2017, delivering proceeds of approximately $156 million and resulting in a one-off gain of approximately $100 million before tax. The 20-year leaseback of the Richlands facility will commence on 1 December 2017 and has two extension options of five years each. Amatil also has a right of first refusal on the sale of the property. It is expected that this one-off gain will be substantially realized as profit after tax due to the utilization of capital losses. This will be recognized in Amatil’s results in the second half of 2017, and be treated as a non-trading item. As previously stated, the one-off gain from the sale of Richlands will offset one-off restructuring costs related to cost optimization programs in Australian Beverages in 2017, which will also be treated as a non-trading item.
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