* Wessanen sees turnaround at U.S. drinks subsidiary ABC
* Profit improvement driven by strong demand
* Sees $17-19 mln in 2011 EBIT at ABC
* ABC's value now 85 mln euros, vs 50 mln before - analyst
* Shares up 7 pct, briefly touch 3.5-month high
(Adds CEO, analyst comments, details, shares)
By Aaron Gray-Block
AMSTERDAM, Sept 14 Dutch food group Wessanen
(BSWSc.AS) postponed plans to sell its U.S. drinks subsidiary
ABC, hoping to cash in on improved profits thanks to strong
demand for its ready-mix cocktails and fruit smoothies.
Wessanen has struggled with debt and lacklustre growth in
recent years, forcing it to sell several businesses and focus on
its organic food business in Europe.
As part of that restructuring, ABC had been earmarked for
sale this year, but Wessanen said on Wednesday that ABC's sales
and earnings growth in the second half of 2011 would beat
previous forecasts, driving its shares to their highest level
since the start of May.
Chief Executive Piet Hein Merckens said on a conference call
the company was seeing "staggering sales" at ABC, and that the
company was investing in new capacity to meet demand. He said
that as a result, interest from potential buyers would only
"We now attach a value of 80 to 85 million euros to ABC,
compared with 50 million euros previously," SNS Securities
analyst Richard Withagen said, upgrading his rating on the
company to "accumulate" from "hold".
Wessanen issued shares last year to reduce debt. Its shares
were up 7.1 percent at 3.033 euros at 0850 GMT, the
second-biggest gainer in a flat Amsterdam market.
Wessanen said ABC would report full-year earnings before
interest and tax (EBIT) of $17-19 million, up from 1.9 million
euros ($2.6 million) in 2010.
It said second-half autonomous sales growth at ABC was now
expected to be well above the 21 percent growth achieved in the
first half of the year, and that further sales and earnings
growth was expected in 2012.
In upgrading the stock to "buy" from "accumulate," KBC
Securities also raised its forecast for full-year EBIT for ABC
to $17.8 million from $5.2 million.
CEO Merckens said he still wanted to sell ABC in the short
term and that Wessanen would assess a potential sale on a
monthly or quarterly basis.
"Wessanen believes that a divestment at this point in time
would not unlock the full value of the business for
shareholders," the company said in a statement.
Besides strong demand, Wessanen said it was supplying its
drinks to new supermarket clients alongside existing customers
Wal-Mart and Kroger and that promotional
activities could further boost its sales.
(Editing by Sara Webb and Will Waterman)