UK: Britvic on course for FY sales jump despite volumes fall
- FY sales up 4.4% to GBP1.32bn (US$2.12bn)
- Operating profits to hit about GBP131m
- Full-year volumes to decline marginally
- UK Q4 sales up 14%
Britvic's merger with AG Barr fell through earlier this year
Britvic is set to post a full-year sales increase helped by the recovery of its Fruit Shoot brand following last year's recall.
Group sales climbed by 4.4% to GBP1.32bn (US$2.12bn) in the 52 weeks to 29 September, the UK soft drinks maker said in a trading update today (17 October). Volumes declined “marginally” because of a weak Irish market, but operating profits are expected to reach about GBP131m, a 16% increase on last year, the company said.
Profits and sales in the past financial year were hit by the Fruit Shoot recall, which saw the juice product taken off shelves in July last year after fears over a faulty cap. Britvic estimated the recall cost the company GBP15m-20m, however it said today the brand's market share is back on track in the UK and Ireland, and ahead of pre-recall levels in France and the Netherlands.
The company also benefited from a strong final quarter as good weather in key markets helped make up for a cold and wet H1 in domestic markets.
Britvic CEO Simon Litherland said: “While we have benefited from the good weather this summer, especially in July, we are particularly pleased to see that Fruit Shoot’s market share is now back at pre-recall levels and continues to grow.”
Q4 sales in the UK are expected to jump by 14%, with carbonate sales up 9%, according to the update. Carbonate volumes in the UK should increase by 7% even while Britvic took a 2% average realised price increase. UK FY sales are expected to increase by 4.4%.
France and “international” sectors look also set to post strong full-year sales increases, however Ireland is expected to post a 3.5% sales fall despite growth in the final quarter.
Britvic will post its full-year results on 26 November.
The trading update made no mention of Britvic's halted merger with AG Barr, which fell through in July this year. The company has since announced it is planning to close three factories and merge its UK and Ireland units, with up to 400 jobs cuts expected.
Britvic's share price was up marginally in morning trading today.
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