Cotts volumes are expected to return to growth in 2013, according to an analyst

Cott's volumes are expected to return to growth in 2013, according to an analyst

A drop in Cott Corp's first-half volumes were caused by temporary factors and overall volume growth should return in 2013, according to an analyst. 

The Florida-based soft drinks firm reported a dip in H1 sales and profits late last week. Overall volumes fell by 5.7% in the period, and were down 9% in the second quarter.

But analysts Stifel Nicolaus said the factors hampering performance in the period were temporary. Two-thirds of the decline was down to "reduced emphasis on casepack water", while a third was due to the poor weather in the UK in the period, it said in a note. 

"The company... expects a more moderate decline in 3Q. We estimate a 2% decline, turning to slightly positive overall volume growth in 2013," the note said. 

On commodities, it said there were indications that COGS per case are on track on to be "flat to down slightly next year", versus 4% to 6% up this year.

Stifel Nicolaus said it reitered its 'Buy' recommendation for the company's shares, based on an "improving balance sheet". But it issued a note of warning: "If management were to change strategy – e.g. focus on acquisitions, structurally increase capital spending – our confidence here could go down."