Britvic's profits watered down by one-off costs though revenues rise

 
Lucy White
Britvic creates favourites such as Robinsons squash and Fruit Shoots (Source: Britvic)

Drinks maker Britvic saw its profits before tax fall in full-year results today, thought the business reasoned this was largely due to investment to drive future growth.

The figures

Britvic's profit before tax fell nine per cent, to £138.8m. Revenue was more promising, increasing 7.7 per cent to £1.54bn, with organic revenue rising 2.5 per cent.

Earnings before interest, tax and amortisation (Ebita) increased 5.1 per cent to £195.5m, and Britvic noted 41 per cent of group revenue is now generated outside Great Britain.

Earnings per share climbed 7.3 per cent to 52.9p, resulting in a full-year dividend increase of 8.2 per cent.

Read more: PepsiCo sells stake in its UK bottler Britvic

Why it's interesting

Britvic attributed much of the decline in profit to its investment for the future through its business capability programme.

With this in mind, the business said it had “demonstrated our ability to deliver both our short-term financial goals and our long-term strategic priorities in the face of a challenging external environment”.

However, Britvic did warn of the government's soft drinks levy coming to the UK in 2018. It said this would create a “high level of uncertainty in the short term”, but that the business had prepared well and was “well placed to navigate it”.

Britvic closed one of its Robinsons squash factories last month, and said today it would transfer the production of Robinsons and Fruit Shoots to other UK sites. This would, it hoped, deliver greater efficiency and reduced distribution costs.

Read more: Britvic's share price falls after it makes Brexit warning

What Britvic said

“We have grown both organic revenue and margins whilst continuing to progress our strategic priorities,” said chief executive Simon Litherland.

“I am particularly encouraged that we have increased the proportion of revenue generated from innovation and accelerated the returns from the business capability programme.

While April 2018 brings uncertainty with the introduction of the Soft Drinks Industry Levy in Great Britain and Ireland, we are well placed to navigate it thanks to the strength and breadth of our brand portfolio and our exciting marketing and innovation plans.

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