The cost savings announced should save Britvic as much as £30m – not far off the £40m of synergies promised by the tie-up with Barr.
With plans to invest internationally and send its popular Fruit Shoots to India, Litherland clearly wants to stamp his mark on the company, having been drafted in just three months ago in the midst of the merger. But an attempt to renegotiate terms on the back of decent results could be risky. Debt at Britvic is still high – £504m – and last year’s Fruit Shoot recall, which cost the firm £25m, proved it can be a volatile compan.
Overconfidence could scupper the deal completely but Britvic has made a decent case for its future as a stand alone company. Investors shouldn’t walk away – even if AG Barr does.