Wednesday preview: Beverage giant Britvic reports

Soft drinks producer Britvic will release its second quarter results Wednesday.

Soft drinks producer Britvic will release its second quarter results Wednesday.

Analysts at Canaccord Genuity said the company's results are likely to reflect tough trading conditions across most categories, bad weather in the UK, a reduction in promotional activity and the recall of its popular children's drink Fruit Shoot.

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

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"The overall numbers will be impacted by the Fruit Shoot recall but the ongoing recovery in this product will be seen as a positive," Canaccord said in a note last week.

"The key question is whether a reduction in promotions has been offset by higher margins to generate greater value and consequently if this has led to a fall in marketing and advertising spend in the first half."

The broker recommended a 'hold' rating and target price of 380p.

Panmure Gordon forecasts revenues to rise by 1.8% to £652m, with adjusted operating profit margins rising by nine basis points to 6.6%. The analyst also rated the stock a 'hold'.

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Britvic was in talks to merge with A.G.Barr but it came to a standstill after the Competition Commission opened an investigation.

Office of Fair Trading had referred the merger to the Competition Commission due to concerns that a tie-up could reduce competition between certain brands of A.G. Barr and Britvic.

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The outcome remains uncertain but the company is expected to hear from the Commission by the end of the month.

Britvic will share the headlines Wednesday with Great Portland Estates, Cable & Wireless Communications and HICL Infrastructure Company as they release their full-year results.

Wednesday May 22th


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