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

Three top-notch Asian stocks to buy
Share tips

Three top-notch Asian stocks to buy

Professional investors Adrian Lim and Pruksa Iamthongthong, managers of the Asia Dragon Trust, pick three of their favourite Asian stocks to buy now.
23 Sep 2022
Why you should short this satellite broadband company
Trading

Why you should short this satellite broadband company

With an ill-considered business plan, satellite broadband company AST SpaceMobile is doomed to failure, says Matthew Partridge. Here's how to short th…
23 Sep 2022
Share tips of the week – 23 September
Share tips

Share tips of the week – 23 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
23 Sep 2022
Momentum investing – and why price matters more than anything else
Investment strategy

Momentum investing – and why price matters more than anything else

The recent fashion for momentum investing, with investors piling into expensive growth stocks, is nothing new, says Merryn Somerset Webb. And the dang…
21 Sep 2022

Most Popular

Beating inflation takes more luck than skill – but are we about to get lucky?
Inflation

Beating inflation takes more luck than skill – but are we about to get lucky?

The US Federal Reserve managed to beat inflation in the 1980s. But much of that was down to pure luck. Thankfully, says Merryn Somerset Webb, the Bank…
26 Sep 2022
The pick of this year's best-performing investment trusts
Investment trusts

The pick of this year's best-performing investment trusts

Market conditions haven’t been easy, but these investment trusts have delivered strong growth, says David Stevenson.
23 Sep 2022
The hidden cost of employee share schemes
Investment strategy

The hidden cost of employee share schemes

Paying employees in shares comes at a cost to investors – but it isn’t always easy to see how much, says Stephen Clapham.
26 Sep 2022