DRINKS maker Britvic wrote down the value of its struggling Irish business and raised guidance on raw materials cost inflation, reducing the impact of a 22 per cent increase in underlying full-year profit yesterday.
Britvic made a pre-tax profit of £109m in the year to 3 October, which was in line with expectations and led the drinks maker to raise its full-year dividend 11.3 per cent to 16.7p.
Revenue increased 14.6 per cent to £1.14bn, driven by strong performance in the company’s core British market, particularly in fizzy drinks. The company added trading in the first few weeks of the new financial year was so far “satisfactory”.
But Britvic’s net debt rose 23 per cent to £451m in the year.
Britain’s second biggest soft drinks maker said it had cut the carrying value of Britvic Ireland’s intangible assets and properties by £104m to reflect poor trading.
It also made an £11.4m write down on the value of three non-core British brands – Ame, Aqua Libra and GB Red Devil. On top of that it was forced to raise input cost inflation guidance one per cent to a range of five to six per cent, reflecting increased juice and sugar prices.
“Ireland has felt the economic downturn more acutely than other markets. We continue to focus our efforts on re-shaping the [Irish] organisation,” Britvic’s chief executive Paul Moody said, adding he remained committed to the business.
“We are in good shape to deliver another robust set of results for the year ahead,” he added despite admitting that he expected the consumer environment to remain challenging.
Shares in Britvic closed down 2.9 per cent to 476p yesterday.