UK: Britvic warns of tough start to 2006
Britvic has warned of full-year earnings nearer the lower end of expectations, only two months after the company floated.
"Since Christmas, there has been a weakening in the total soft drinks market in the UK," the company said yesterday (2 March).
Britvic blamed the acceleration in consumer trends towards 'better for you' for the fall. The company added, however, that it was performing well against this background, particularly in adult, cola and juice drinks.
"Despite the current challenging market conditions, the growth of stills and no added sugar carbonates continues to play to the strength of Britvic's existing portfolio and NPD pipeline," said Paul Moody, CEO of Britvic.
"If the soft drinks market shows recovery over the balance of the year as we anticipate, we remain confident of delivering earnings within market expectations, albeit at the lower end."
Britvic added that, for the 12 weeks to 25 December, revenue was up by 1% and operating profit pre-exceptionals rose by 5% compared to the same period last year.
The company also said that it is making good progress in cutting overheads, which is on course to deliver at least a further GBP4m (US$7m) above its target of GBP6m for this year.
The Britvic portfolio in the UK includes Robinsons and Tango as well as Pepsi and 7UP, which Britvic produces, markets and distributes under an exclusive deal with PepsiCo which is scheduled to run until 2023.
The UK's second largest soft drinks group floated in December last year, at a price of GBP494m or GBP2.30 per share.
Whitbread and Pernod Ricard, which each held a 23.75% stake in the company, sold their entire holdings.
Britvic's largest shareholder, InterContinental Hotels, sold 77% of its interest and granted an over-allotment option that could see it sell off its entire 47.5% stake for a total of GBP235m. PepsiCo, meanwhile, retained its 5% stake.
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