Moody’s Investors Service has upgraded Canadian soft drink maker Cott Corp’s credit rating on the strength of its recent operating performance.
Last month, Cott announced that it had swung to full-year profit in 2009 and said it expects to win more new business in 2010. Profits for the 12-month period amounted to US$81.5m, compared to a loss of $122.8m in 2008.
Earlier this week, US analyst Moody’s subsequently revised its outlook to positive, lifting the firm’s rating to B2 from B3.
Moody’s said Cott has been focusing on generating cash and debt reduction, and noted the success of its 2009 capital market transactions and its enhanced liquidity position.
Analyst Brian Grieser wrote: “While the beneficial pricing dynamics that supported Cott’s performance in 2009 will diminish in the first half of 2010, as national brands may lower prices to regain share, the strength of Cott’s balance sheet and liquidity profile is expected to cushion the impact of any near-term operational weakness.”
Grieser added that continued ratings progress will be dependent on Cott’s ability to sustain a “strong operational performance in more competitive pricing environment”, given its “historical sensitivity” to pricing actions of national brands
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataCott’s shares rose $0.15, or 2%, to $8.12 in afternoon trading on Wednesday.