Britvic boosts profit despite tough markets

Soft drinks firm Britvic served up a strong set of interim results, after an improved underlying performance across the business, but cautioned market conditions remain challenging.

Soft drinks firm Britvic served up a strong set of interim results, after an improved underlying performance across the business, but cautioned market conditions remain challenging.

Pre-tax profit rose to £37.5m in the 28 weeks ended April 15th 2013 from £24.8m the same time a year earlier. Revenue slipped to £639.2m during the period from £641.1m last time on an actual exchange rate. On a constant exchange rate, revenue was up 0.4%.

Adjusted earnings per share rose 47.6% to 12.4p and the dividend has been increased 1.9% to 5.4p.

Strong margin and pricing growth was seen every business unit, the group said.

Underlying earnings before interest, taxes and amortisation (EBITA) for the first half increased 17.9% after adjusting for the timing of its marketing programme and the one off cost of the recall of Fruit Shoot.

As well as the recall, its markets experienced poor weather over March and Easter. The economic backdrop continued to be difficult with consumer discretionary spending remaining subdued, the group explained.

In the first six months of its financial year, the take-home market in GB saw volume fall by 1.7% and in the last 12 weeks it declined by 2.6%

However Britvic said it achieved strong pricing, revenue, brand contribution and margin growth in all areas of the business, with the exception of GB stills and Ireland because of availability of Fruit Shoot.

Bottles of Fruit Shoot were recalled due to a packaging safety issue last year.

Chief Executive Simon Litherland added: "Britvic has delivered strong first-half profit growth, a material improvement in cash flow and a reduction in net debt. This has been achieved by growing our average realised price, a continued focus on cost."

Britvic said strong momentum has continued moving into the second half, with substantially increased levels of marketing investment.

The group also announced a new cost reduction strategy, which includes merging its GB and Ireland businesses.

"We intend to change our operating model to generate stronger performance in our core markets and accelerate the increasingly attractive international opportunities, underpinned by a reduction in the cost base of £30m per annum by 2016."

Britvic said it is confident that we will deliver full year EBITA towards the upper end of our previously communicated range of £125m - £131m.

The group reduced adjusted net debt by £30.7m.

CJ

Recommended

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework
Investment strategy

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework

John Stepek talks to Steve Clapham, investor, analyst and author of The Smart Money Method, about the dangers in picking individual stocks and why you…
8 Apr 2021
BP looks set to return more money to shareholders as it beats expectations
Energy stocks

BP looks set to return more money to shareholders as it beats expectations

Oil major BP is to embark on a share buyback programme after significantly reducing its debts. Saloni Sardana looks at what it means for your portfoli…
6 Apr 2021
Deliveroo has hit the market – but it’s not getting the warmest welcome
UK stockmarkets

Deliveroo has hit the market – but it’s not getting the warmest welcome

Food delivery company Deliveroo made its debut on the stockmarket this morning. But with the share price sliding by 30% straight away, it’s not made t…
31 Mar 2021
Three stocks to buy now that will come back stronger after Covid-19
Share tips

Three stocks to buy now that will come back stronger after Covid-19

Professional investor Ed Wielechowski of Odyssean Capital, chooses three compelling stocks that should thrive in a post-pandemic world.
29 Mar 2021

Most Popular

The bitcoin bubble will burst: here’s how to play it
Bitcoin

The bitcoin bubble will burst: here’s how to play it

The cryptocurrency’s price has soared far beyond its fundamentals, says Matthew Partridge. Here, he looks at how to short bitcoin.
12 Apr 2021
Four investment trusts for income investors to buy now
Investment trusts

Four investment trusts for income investors to buy now

Some high-yielding listed lending funds have come through the crisis with flying colours. David Stevenson picks four of the best.
12 Apr 2021
Central banks are rushing to build digital currencies. What are they, and what do they mean for you?
Bitcoin

Central banks are rushing to build digital currencies. What are they, and what do they mean for you?

As bitcoin continues to soar in value, many of the world’s central banks are looking to emulate it by issuing their own digital currencies. But centra…
8 Apr 2021