UK: Britvic bucks downward trend with FY rises

By | 26 November 2008

Britvic has reported a healthy lift in its full-year operating profit on the back of a similar rise in sales.

The UK-based soft drinks company and PepsiCo bottler said today (26 November) that operating profit for the year to the end of September was up by 20.9% on a year earlier, coming in at GBP96.7m (US$148.4m). Group sales climbed by 29.3% to GBP926.5m, driven by the first full-year presence of Britvic Ireland, which delivered GBP200.7m in sales.

Profit after tax and exceptional items hit GBP31.8m, down on the GBP44m net profit delivered in the last fiscal year. The company blamed the slide on GBP18.3m of one-time operating costs, primarily from the closure of its soft drinks plant in Cork, Ireland at the beginning of this year.

In Britvic's main market, the UK, the company said it continued to outperform the soft drinks market in all key categories, with volume and value share gains by core brands, in particular Pepsi, Robinsons and Fruit Shoot. The UK soft drinks market fell by 0.8% in volume over the period, Britvic noted, due mainly to the impact of the consumer slowdown and a second consecutive year of adverse summer weather. Despite this, Britvic's non-CSD volumes in the country were up by 8.1%, with CSD volumes rising by 4.2%.

The company's international business, meanwhile, achieved "high-growth results", with overall revenue growth of 21%. During the year, the Robinsons brand increased its revenue by 94% in the Nordic region driven by increased distribution, a strong advertising campaign in Denmark, and Finland, heavyweight in-store sampling campaigns in all three markets, and the Q4 launch of Robinsons premium squash, Britvic noted. In the Netherlands, Fruit Shoot has established itself as the fastest growing 'kids' juice' brand, while the company has continued to expand its footprint in the tourist areas of Spain and the Mediterranean, with early successes recorded in the Middle East and India. "These markets represent a strong opportunity for future development and growth," the company said.

"This is a strong performance achieved despite very challenging trading and cost environments," said company chief executive Paul Moody. "Conditions in the soft drink market continue to be tough at the beginning of our new financial year and, given the adverse macro environment, market visibility beyond the short term remains limited."

Britvic also said that it is proposing a final dividend per share of GBO0.088, bringing the full-year dividend per share to GBP0.126. "This reflects the board's continuing confidence in the future prospects of the business and the underlying cash generative nature of its activities," Britvic concluded.

In May last year, Britvic acquired the soft drinks and distribution business of C&C Group in the Republic of Ireland and Northern Ireland for EUR249.2m (US$337.5m). Among the brands sold in the deal were Ballygowan water, Cidona, MiWadi, and Energise Sport. Britvic also took control of the rights to Pepsi and 7Up brands in the countries.

Sectors: Soft drinks, Water

Companies: PepsiCo

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