Britvic profits shrink after recall

Soft drinks firm Britvic said progress among its carbonates brands was overshadowed by its Fruit Shoot recall along with the cold and wetter than usual British summer.

Pre-tax profit fell 19.7% to £84.4m for the 52 weeks ended September 30th 2012 while revenue slipped 2.6% to £1.256bn. Costs associated with the Fruit Shoot recall of £16.9m with the balance of up to £8m to come in 2013.

Chief Executive Paul Moody commented: "Our GB carbonates brands, and Pepsi in particular, significantly outperformed the market in this Olympic year, Robinsons squash returned to its two year historic high share of the market, our syrups brands in France increased volume and value share, and the expansion of our US franchise business developed in line with our stated plan."

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However progress was eclipsed by the expensive Fruit Shoot product recall.

"Additionally, the negative macro-economic trends, leading to weak consumer confidence and the cold, wet summer endured across most of our markets, weighed heavily on the soft drinks market and Britvic within it."

Britvic said the financial impact of the recall is expected to be between £15m and £25m. Otherwise it said the Fruit Shoot re-entry plan was on-track.

"The Fruit Shoot product recall was regrettable, but necessary in order to protect the safety of our consumers. The business responded quickly and efficiently to manage the situation and refocused our priorities as required over the balance of the year."

Net debt was reduced to £511.7m from £530.2m the same time last year as the group embarked on cost cutting measures.

A full year dividend has been maintained at 17.7p per share and as previously reported a special interim dividend of 10p has been recommended once the merger with AG Barr becomes effective.

CJ