UK: Britvic sees YTD sales jump, but volumes sag
- YTD sales up by 1.5% to GBP955.5m (US$1.46bn)
- YTD volumes drop by 3.3%
- Q3 sales up by 5.4% to GBP316.3m
- Q3 volumes down by 1.5%
Britvic dropped out of a merger with AG Barr this month
Britvic has posted a rise in year-to-date and third-quarter sales but volumes continued to drop in the UK and Ireland.
The soft drinks maker, which this month abandoned a planned merger with AG Barr, said in a trading update today (25 July) that net sales rose by 1.5% to GBP955.5m (US$1.46bn) in the nine-months to 7 July (30 June for Britvic's France and Ireland markets). Q3 net sales increased by 5.4% to GBP316.3m, Britvic said.
The group's CEO Simon Litherland said Q3 continued to be a “challenging consumer environment” but added that he expected full-year EBIT to be at “the upper end of our guidance range of GBP125 to GBP131m”.
He also said the company is “fully focused” on the strategy he outlined in May after taking over as CEO in February.
The strategy is part of Britvic's determination to operate as a standalone company and includes costs savings of GBP30m a year through the closure of three facilities and the loss of up to 15% of its staff.
Today's sales increases should strengthen Britvic's claim it does not need to merge with Barr, however some analysts have said declining volumes point to weaknesses in Britvic's core UK and Ireland businesses.
In the update, the company said overall YTD volumes fell by 3.3% and Q3 volumes fell by 1.5%. Q3 carbonates volumes in the UK dropped by 2% while stills volumes declined by 0.6%. Ireland’s overall volumes also fell, by 2.5%, over the same period.
In H1 results released in May, volumes were also weak, with reported falls in all regions.
International results were strong again in Q3, with a 25% increase in sales. Britvic said its Fruit Shoot brand has now been rolled out to 32 US states.
Today's statement made no mention of the collapsed Barr merger.
In morning trading, Britvic's share price dropped by 1.3%.
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