Britvic shares rise after recall storm subsides

By Anne Bruce

- Last updated on GMT

Related tags: Coca-cola

Poor weather and the £25M recall have dampened Britivic’s results
Poor weather and the £25M recall have dampened Britivic’s results
Shares in troubled drinks firm Britvic rose slightly today (July 19), as it posted results for the period that saw the multi-million pound recall of its Fruit Shoot drinks.

The results, for the third quarter of its financial year, from April 16 to July 8, showed group revenues down by 7.6% to £300.1M. This included a negative currency impact of 2.5%. The firm attributed the results to low volume sales and poor weather plus the Fruit shoot recall.

The news was no worse than the City had expected and shares rose about 2% to £290.50.

The company had already admitted earlier this month that the Fruit Shoot recall, due to a safety problem with a new cap design, could cost it up to £25M. It had also warned the City that trading had been affected by poor weather.

‘Worst of the storm’

Analyst Nicola Mallard from Investec put a ‘Buy’ recommendation on the stock. The “the worst of the storm”​ was hopefully over, she noted.

The company’s Pepsi brand market share of the take-home cola market, as measured by Nielsen, had grown again during the quarter in both volume and value. Its Robinsons brand had also gained market share, she pointed out.

But Damian McNeela, analyst with Panmure Gordon repeated his ‘Sell’ recommendation.

Challenging environment

 “Given the challenging environment in the UK and Ireland and the concerns that have been raised given the magnitude of the Fruit Shoot recall, we feel the shares are best avoided for the time being,”​ said McNeela.

Pepsi-rival brand Coca-Cola was one of the main sponsors of the Olympic Games and was likely to be omnipresent over the coming weeks and was heavily promoting its products, he said.

Also McNeela noted: “The operating environment in the UK is set to remain challenging with the high levels of promotional activity likely to continue.”

Meanwhile, the source of Britvic’s £25M Fruit Shoot recall was traced to a six-year old boy from Colchester who nearly choked on a ‘spill proof’ cap.

Alexander Farries’ mother Shelley Farries said the lid came off her son’s bottle and he started gasping while drinking. The cap was dislodged and he was unharmed.

To read more, click here​.

 

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