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Cott Corp Q4 hit by one-off, but FY rides wave of DS Services water purchase

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  • FY net profits leap by 25.6% to US$20.6m
  • Net sales in 12 months to 2 January also jump, by 40% to $2.94bn
  • Operating profits total $99.4m versus $15.7m in 2014
  • Q4 net losses come in at $2.9m compared to $21m profits in quarter-prior
  • Net sales in final three months up by 28.6% to $698.8m
  • Operating profits hit $18m after losses total $33.6m a year earlier

Cott Corp has posted a lift in full-year profits in 2015, despite taking a tax-comparison hit to its bottom line in the final quarter.

Cott Corp included results from DS Services in its full-year figures for the first time

Cott Corp included results from DS Services in its full-year figures for the first time

The private-label drinks producer and home & office bottled water provider said yesterday that net profits for the 12 months of the year totalled almost $21m, despite a net loss of $2.9m in the last three months of 2015. Net sales in both the year and quarter improved markedly for Cott, by 40% and 28.6%, respectively. 

The firm flagged the addition of the DS Services and Aimia Foods businesses to its results for 2015. Cott completed its US$1.25bn acquisition of DSS Group, the parent company of DS Services, at the end of 2014. Stripping out sales from DSS, Cott saw its top line dip by 7.3% in the year and by 13.9% in the fourth quarter.

Net profits were affected predominantly by the cycling of an income tax benefit in the fourth quarter of 2014 of $65m. The high one-off, due primarily to "the release of a valuation allowance", compared to a tax benefit in the last three months of 2015 of just $6m.

Volumes from its core North America operations were described as "stable", although net sales from Cott North America dipped by 7.2% in the year.

"I am pleased with the progress made in pursuit of our strategic priorities in 2015 highlighted by … (the) successful pursuit of follow-on home and office acquisitions, as well as significant growth in contract manufacturing within our traditional business," said CEO Jerry Fowden.

"We believe that the platform we are creating in home and office services for water, coffee and tea both organically and via further synergistic transactions will provide underlying mid-teen annual growth in free cash flow over the coming years."

To read Cott Corp's full-year results, click here.


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