Carbonates put fizz in Britvic results

Carbonates sales in Great Britain rose by more than 10.4% in the period, driven by Pepsi’s strong growth of 9.9%.

International revenue increased by 3.8%, with Fruit Shoot continuing to build its US momentum, said the firm. Shipments of concentrate to the US rose, while Fruit Shoot won new listings and new independent bottler agreements in the quarter. The second manufacturing facility also came on stream.

Short-term supply restrictions​

But international revenue was weaker than expected due to the transfer of a Fruit Shoot production line resulting in short-term supply restrictions in the European market, according to the firm.

Britvic predicted full-year operating earnings will be in the top end of the £148–156M range.  

In Ireland revenue fell by 4.3% compared with the same period last year. Although third quarter volumes rose by 1%, average retail price fell by 1.3%.

In France, revenue rose by 5.6% during the quarter. Volume increased by 4.1%, with average retail price up by 1.5%, compared with what was said to be a stong comparison the previous year. In the French market Fruit Shoot had reinforced its position as the leading brand in the children’s juice drink category, said the firm.

City analyst Investec welcomed the “solid”​ performance. It’s analyst Nicola Mallard said: “A strong performance from UK carbonates was the highlight, although weakness in the stills category continues.”​

The stills category, excluding water, fell in the third quarter with volume down 2.6% and value down 0.1%. Britvic stills revenue fell by 3.9%, with both volume and average retail price down. J20 also faced tougher competition in the on-trade in particular, with competitor promotional activity.

Key risks​

Investec repeated its ‘hold’ advice on Britvic stock, identifying key risks as being a poor fourth quarter or a delay in delivering anticipated cost savings.

Simon Litherland, chief executive, said: “The business has continued to grow, despite the challenging retail trading and consumer environment in our European markets. ​

“This year’s innovations, including Robinsons Squash'd, have performed well and our consumer marketing campaigns have been highly impactful, including our sponsorship of the Tour De France and the association of Pepsi with football, which helped to deliver an exceptionally strong carbonates performance.”​

But he warned the business will be encountering tough comparatives, due to very warm weather last summer.

Meanwhile, Britvic rival Nichols reported profit before tax up by 11% to £10M in first half results to June 30.