Update - UK: Analysts lower Britvic FY forecast on Q1 sales
The analysts expect Britvic to deliver “double-digit EPS growth” over the next three years
Panmure Gordon analysts have cut their full-year profits target for Britvic, on the back of sales declines in the firm's UK stills division and in Ireland.
This morning (25 January), Britvic recorded an increase in first-quarter sales, driven by a strong gain in market share for the Pepsi brand in the UK. However, the Tango producer, which also bottles PepsiCo's drinks brands in the UK and Ireland, reported a 10% drop in sales in its Irish market and a 1.7% decline in its UK stills unit.
"The ongoing weak consumer environment resulted in further deteriorations in GB stills and Ireland," the analysts said. "Given the negative mix effect of GB stills and a weaker Irish performance we are reducing our profit-before-tax forecasts by GBP4m (US$6.2m) to GBP116m (at the lower end) and by GBP6m to GBP131m (at the top end)," the analysts added.
However, they said: "The shares continue to trade at a significant discount to its peer group and we reiterate our 'buy' recommendation."
The analysts said they expect Britvic to deliver "double-digit EPS growth on average" over the next three years.
Britvic's share price climbed by 2.9% to 345.70 pence at 1154 GMT today.
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