News Column

Britvic First-Half Profit Boosted By Volume Increases, Higher Prices

May 21, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - Shares in Britvic PLC were one of the biggest gainers on the FTSE 250 Wednesday, after the soft drinks maker said it delivered strong revenue, profit and margin growth in the first half of the year, supported by volume increases, higher prices and increased market share.

The British maker of Robinsons cordial and Tango and Fruit Shoot soft drinks raised its interim dividend by 13% to 6.1 pence per share, highlighting a confident outlook for the year ahead, the company said.

"Whilst we anticipate that the consumer environment is likely to remain challenging across our core markets, we remain confident of delivering [earnings before interest and taxes] in the range of GBP148 million to GBP156 million for the full year," said Chief Executive Simon Litherland in a statement. In the full 2013 financial year, Britvic recorded EBIT of GBP135 million.

For the 28 weeks to April 13, the group recorded EBIT of GBP59.0 million, up from GBP52.0 million a year before. Pretax profit was GBP37.1 million, up from GBP32.8 million the prior year, boosted by an increase sales on the back of volume growth and price increases. The recent pretax profit figue included GBP8.2 million in exceptional charges, up from GBP4.7 million a year before.

Revenues for the period increased 4.9% at actual exchange rates, and slightly less on a constant exchange rate basis, to GBP670.7 million from GBP639.2 million a year earlier.

Britvic said it sold over 1 billion litres of soft drinks in the period, an increase of 3.9% on the previous year.

Britvic said GB revenue rose 5% in the period and outperformed the geography's overall take-home soft drinks market, while revenue in France was up 7% and down 5.2% in Ireland, as weakness in the Irish market continued. It said that GB carbonates also delivered good revenue growth, although volumes increases in Fruit Shoot were offset by volume decline in Robinsons and J20.

"In addition, our international business is progressing well and the nationwide distribution of Fruit Shoot in the USA is an important milestone as we seek to exploit the international potential of our brands," said Litherland.

Britvic said that it now has nationwide distribution of its Fruit Shoot brand in the US, and has secured a number of new agreements with independent bottlers, while Fruit Shoot is on track to launch in India, with in-market production to commence imminently.

The group also said that its cost saving programme continues to gain traction across the business, and is on track to deliver annual cost savings of GBP300 million by the 2016 financial year.

"Of these annual savings we intend to invest GBP10 million behind the expansion of the international business," the company said.

Britvic shares rose 4.8% in early trading Wednesday, to 727.83 pence.

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Source: Alliance News

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