UK: Britvic warns Fruit Shoot recall could now hit profits by up to GBP25m

Britvic has admitted it has been unable to "speedily resolve" the issues around the recall of its Robinsons Fruit Shoot and Fruit Shoot Hydropacks and the situation could now hit profits by up to GBP25m (US38.9m). 

The soft drinks firm also warned this morning (11 July) that trading conditions have not improved since it last reported in May and the group expects to deliver full-year results  "at the bottom end of market expectations". Last week Britvic announced it was recalling the Fruit Shoot drinks, which feature a new cap design, as a "precautionary measure". 

However, the company said today it had failed to resolve the problem and was re-supplying the drink in an "alternative in-market proven sports cap, in the short term". 

"As a result we will start to re-supply customers in six weeks, with a gradual increase to enable us to meet historic levels of demand within six months," the company said. 

Britvic originally said the recall could hit profits by up to GBP5m. Today, the firm said, it is "difficult to be precise" about the financial implications as it was a "developing situation".

But it added: "We believe this will now have an impact on the group profit before tax in the region of GBP15m to GBP25m across the current and next financial year."

This figure included an "anticipated impact in 2013 financial year of between GBP5m and GBP7m", the company added. 

The recall does not affect Fruit Shoot in the USA, Australia or Republic of Ireland and Fruit Shoot My-5 is not being recalled, Britvic said. 

Analysts Panmure Gordon said it has reduced its forecasts by 25% for Britivic's FY and downgraded the stock from "hold" to "sell". "Whilst Britvic cannot control the weather, we believe the issue surrounding the product recall was avoidable," it said. 

The company will give an update on trading in a Q3 IMS next Thursday (19 July). 

Shares in Britvic were today down 15.62% at 253.3p.