Britvic profits fizz in spite of Ireland gloom
SHARES in Tango-to-Robinsons beverage maker Britvic soared yesterday to their highest point in almost a year, after the firm posted a 16.3 per cent hike in half-year profits and said the UK soft drinks market had turned a corner.
The group’s pre-tax profit before exceptionals rose to £20m for the six months to 12 April, from £17.2m last year. Post-exceptionals, profit came in at £7.2m, up 1.4 per cent on 2008, while revenues rose 6.3 per cent to £483.2m. The group increased its interim dividend by 7.9 per cent to 4.1p.
Britvic said demand for soft drinks had improved since the beginning of the year, with sales in the UK take-home market remaining flat in the last month, compared to a fall of 2.1 per cent over the past 12 weeks and 3 per cent over the period as a whole.
“As we look at the whole market we have begun to see some modest recovery in growth,” said chief executive Paul Moody.
“Soft drinks has been a resilient category in the face of the downturn, especially the brands,” he added.
The group’s shares rose 12.74 per cent to close at 303p over the course of trading yesterday.
Profit at Britvic’s British and international businesses grew 17.7 per cent over the half year, though its Irish unit, which took a severe hit after the country’s economy was left reeling from the economic crisis, only managed to break even.
Moody said it remains cautious about the Irish business for the rest of 2009 and 2010, as consumers trade down to value-for-money non-branded goods in the downturn.
“We see no evidence at present of any upturn in the Irish soft drinks market,” he said, adding that Britvic had implemented a strict cost-saving strategy at the division, where it recently announced 145 job cuts.