UK: Britvic says recall could hit profits by up to GBP5m
Analysts suggest there will be "no long-term damage" to the Fruit Shoot brand
Britvic has estimated the recall of its Robinsons Fruit Shoot and Fruit Shoot Hydro brands in the UK could hit the firm's profits by up to GBP5m (US$7.8m).
The soft drinks firm yesterday (3 July) issued a product recall of the two products in the country over a "safety issue" involving a new "spill-proof" cap. The move was "a precautionary measure", the company said.
But, in a statement to the London Stock Exchange, Britvic added: "The potential financial impact of the recall is being analysed, but at this very early stage it is anticipated that there will be a limited cost estimated at between GBP1m and GBP5m to profit before tax in the current financial year."
A Britvic spokesperson told just-drinks the company was not yet aware of how many bottles were affected.
Analysts Cannacord Genuity said the recall has come at a "challenging time" for Britvic. "With the UK suffering from the wettest start to summer on records, the outlook remains poor," it said.
However, the anaylsts suggested there would not be "long term damage to the brand, as the issue is packaging-related, not its contents."
Britvic is due to issue a Q3 IMS on 19 July.
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