UK: Britvic to launch Fruit Shoot in India as H1 profits jump
- H1 net profits up by 32% to GBP24.7m (US$37.3m)
- Net sales slip by 0.3% to GBP639.2m
- Operating profits climb by 15.7%, hitting GBP32.8m
- Plans to close two factories and a warehouse
Britvic is to close two of its factories and a warehouse
Britvic has today (22 May) unveiled plans to launch its Fruit Shoot juice brand in India as it reported a healthy surge in first-half profits.
Net profits rose by 32% to GBP24.7m (US$37.3m) in the 28 weeks to 14 April, the company said. Net sales stayed flat at GBP639.2m over the same period, while operating profits climbed by 15.7% to GBP32.8m.
The group, whose plans to merge with AG Barr were halted by a competition probe in February, said it has signed a deal with India's Narang Group to distribute Fruit Shoot in the country starting in the middle of next year.
The deal comes just under a year since the company lost an estimated GBP25m in a recall of Fruit Shoot caused by a faulty cap design.
However, since then Britvic has returned the brand to UK shelves and struck a deal with PepsiCo to launch in the US.
Today, Britvic said it has increased Fruit Shoot's footprint in the US to 32 states after agreeing with Pepsi Cola Bottling Company of Pittsburgh to distribute the brand in Kansas and Missouri.
The company also said today it plans to join its UK and Ireland units and close two factories and one warehouse in the UK as part of a strategy that aims to save GBP30m a year by 2016.
“Today we have announced a new strategy which will lead to a step change in performance and improved returns for shareholders,” said Britvic chief executive Simon Litherland, who replaced Paul Moody in February. “We intend to change our operating model to generate stronger performance in our core markets and accelerate the increasingly attractive international opportunities.”
Litherland said that despite the jump in profits, Britvic's H1 market conditions “remained challenging” and the company posted volumes decreases in all of its regions. Looking ahead, Litherland said Britvic has increased its marketing investment for the second half of the year.
In morning trading, Britvic's share price surged, up by 9% at 10am.
To read the company's official statement, click here.
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