Analysis - Britvic on course for recovery
Britvic is heading for a better year in 2013
Britvic is well positioned for a recovery in 2013, helped by its Fruit Shoot brand being back in full distribution and a new CEO, an analyst has said.
The company, whose plans to merge with AG Barr are facing a competition probe, was hit with a product recall of its Fruit Shoot Brand last year. The company reported a 19% drop in full-year net profits in November, but a sales lift in this year's first-quarter.
Fruit Shoot is now back on UK shelves and Britvic has struck a deal with PepsiCo to roll-out the brand in the US. The group also appointed Simon Litherland as its new CEO last month.
"The business feels in better shape than it was when merger discussions were first announced," analyst Investec, which has re-iniated coverage on Britvic, said in a note today (7 March).
It added: “The balance sheet gearing is at the higher end of the acceptable range, but the group is focused on improving cash conversion.”
However, Investec warned that the prospects for the UK soft drinks market this year are uncertain as pressure on consumers continues. But, it noted that soft drinks are “proving resilient”. “As in previous years, carbonates are likely to lead the charge, outperforming stills,” the note added.
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