US/CANADA: Q1 bodes well for Cott Corporation
Cott Corporation has swung from loss to profit in the first quarter of this year.
The company, which is the world's largest private label soft drinks producer, said today (1 May) that net profits for the three months to the end of March came in at US$20.8m, compared to a loss of $20.9m in the corresponding period a year ago. The turnaround came despite a slight dip in sales, to $367m from $389.7m.
Operating profits followed net profits, coming in $22.3m in the black versus a loss of $12.2m 12 months ago.
In North America, beverage case volumes were up by 4.6%, primarily driven by the trend of consumers shifting to retailer brands, the company said.
In the UK, however, volumes dipped by 9.8%, due in part to increased promotional activity by the national brands early in the quarter and reduced promotional activity by retailers on private label brands.
Revenue from the UK subsequently declined 31.1% to $64m, with the country posting a $2.6m operating loss, against an operating profit of $2.2m in Q1 2008.
"Cott's renewed focus on private label, coupled with consumers seeking better value in high quality retailer brands, drove an improved sales trend in North America," said Cott's CEO, Jerry Fowden. "This trend, in addition to our focus on reducing costs, helped Cott return to profitability.
"We still have a long way to go, but after several quarters of losses, we are encouraged by our improved volume, cash flow and bottom-line performance."
Going forward, Fowden added that the company will focus on further strengthening customer relationships, continuing the push for lower operating costs, controlling capital expenditures, and managing working capital.
"While we are pleased with our first quarter results, we are keenly aware that the competitive landscape is changing, promotional activity on carbonated soft drinks is expected to increase, and that additional challenges lie ahead," he said.
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