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

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020

Most Popular

Bitcoin: fool’s gold or the new gold?
Bitcoin

Bitcoin: fool’s gold or the new gold?

With bitcoin hitting new highs last week, and close to becoming a mainstream investment, is it really gold for the 21st century?
15 Jan 2021
Forget austerity – governments and central banks have no intention of cutting back
Global Economy

Forget austerity – governments and central banks have no intention of cutting back

Once the pandemic is over will we return to an era of austerity to pay for all the stimulus? Not likely, says John Stepek. The money will continue to …
15 Jan 2021
The MoneyWeek Podcast: bitcoin special
Bitcoin

The MoneyWeek Podcast: bitcoin special

Merryn talks to bitcoin experts Dominic Frisby and Charlie Morris to get the lowdown on the cryptocurrency to find out why it's such a huge global phe…
15 Jan 2021
Free 6 issue trial then continue to