Britvic, the UK's largest soft drinks firm, is targeting acquisitions as it looks to build on strong sales and profits momentum in its most recent fiscal year.

A 23% rise in pre-tax profits, strong cashflow and healthy sales in the year to 27 September have put Britvic in expansive mood.

"We're ready to go," Britvic finance director John Gibney told analysts in the firm's full-year results call today (25 November).

"We know where we would like to go, but it depends on current incumbents to actually engage in the deal," said Gibney.

He declined to comment on possible targets, but added that Britvic has already looked at three or four possibles and walked away because "the value was not right".

Britvic's net debt to ebitda ratio is around 2.4. Acquisition of existing businesses is preferred over entering markets and building from scratch, the group said.

"They need to make an acquisition and it is the right time to do so," Wayne Brown, analyst with Altium Securities, told just-drinks.

"I think they must be very close," he said, adding that he expects the group to target Europe, and particularly the Netherlands and Scandinavia where the firm already sells its Robinsons and Fruit Shoot drinks brands.

Brown praised Britvic for a "terrific" set of full-year numbers but he warned that the firm faces "material challenges" over the next year as benefits from restructuring and lower advertising and promotion (A&P) spend wear off.

A&P spend as a percentage of net sales was around 5.5% in the group's most recent year, as it benefited from cheaper advertising rates in the UK and also lower cost digital media.

Britvic CEO Paul Moody said today that the firm plans to return A&P spend to historical levels of around 6-7% of annual sales.  

He also said that the group, which owns the licence to PepsiCo brands in the UK, sees a "massive opportunity" in convenience and impulse soft drinks channels and will look to capitalise on this in 2010.

In the group's outlook, Moody said: "We are encouraged by our strong group performance in the early weeks of the new financial year."

But, he added: "Visibility in both GB and Ireland beyond the short term remains limited and we take a cautious view of consumer spending."