UK: Britvic over the hump after "miserable" Q3 - analyst
A recall of Britvic's Fruit Shoot brand hurt Q3 results
Poor weather and a recall of its Fruit Shoot brand meant a “broadly miserable quarter” for Britvic, analysts Investec said in a note today (19 July). However, the note praised moves to reduce capital spend, and Investec's full-year guidance remains unchanged.
“It appears the worst of the storm is over,” it said.
Canaccord Genuity's note was more in line with today's earlier gloom when Britvic reported a 5.1% group revenue drop in Q3 compared to a year earlier. Volumes dropped in every reported region, and bad weather and the recent recall saw falls for Britvic's core UK and Ireland markets.
Canaccord blamed a poor trading environment for slow UK sales across all channels and said half of a 13.3% drop in UK stills volumes was down to the recall.
“The performance of the French business remains a growing concern with volumes down 2.4% and whilst offset by price increases it is only a matter of time until negative operational gearing takes effect,” the analyst said.
“No change to forecasts but risks remain firmly on the downside,” it said.
Nomura said the effects of the recall and bad weather added up to a damp Q3, though Britvic performed broadly in line with expectations. Franchising moves in the US are cause for optimism and should mean a firmer full-year update in November, it said in a note.
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