Britvic results benefit from European growth
Britvic posted revenue growth of 4.7% to £670.7M, with volume growth of 3.9%.
Revenue from Britvic’s British business was up by 5%, outperforming the UK take-home soft drinks market, said the firm. In France revenue rose by 7%. Earnings per share climbed by 16.9% to 14.5p.
The results impressed City analysts Panmure Gordon and Investec. Panmure Gordon’s Damian McNeela highlighted the firm’s recent progress.
Fruit Shoot business
“Pleasingly the company is making good progress in delivering cost savings, reducing net debt and expanding the distribution of its Fruit Shoot business in the USA,” said McNeela.
Britvic said it was on track to deliver £30M of cost savings by 2016. It also confirmed the new operating model has been established.
In the massive US market, the firm revealed it had secured nationwide distribution of Fruit Shoot. In partnership with PepsiCo Americas Beverages, Britvic is being distributed in new states, such as California. The firm has also agreed deals with independent bottlers, including Admiral Beverages Corporation for states including Idaho and Wyoming.
The Indian Fruit Shoot launch was also said to be on track.
Profit before tax forecast
The soft drinks firm maintained its profit before tax forecast of between £148M–£156M for financial year 2014. Panmure Gordon predicted profit before tax of £154M and forecast earnings per share growth of 17% to 41.1p in 2014.
Panmure Gordon repeated its ‘buy’ guidance on Britvic’s stock.
Ivestec also thought the results maintained the firm on track to deliver its profit forecast. Investecd analyst Nicola Mallard said: “Most of the work behind the delivery of the new strategy is now complete (new management teams and factory closures) and the benefits should start to flow through from the second half.”
Mallard forecast profit before tax at about £150.5M. “This compares with £135M last year,” she added. “But the warm summer added £5m to this and may or may not be repeated. Risks include a grocery price war or imposition of a sugar tax.”
Investec maintained its hold advice on ‘Britvic’ shares
Simon Litherland, Britvic’s ceo, said the business had made significant progress in transforming the business and delivered a strong set of results this year.
“We are on-track to deliver our cost savings programme, the core business is performing well and our international ambitions are developing at pace,” said Litherland. “This all gives us confidence in our prospects for long-term growth.”
