Britvic reports solid interims and predicts on target full-year

EBITA grew despite Britvic’s group revenues falling by 3% to £650.3M for the 28 weeks to April 12. Shore Capital analyst Phil Carroll attributed this to technical problems at the company’s factory in The Netherlands.

Britvic, which manufactures Robinsons, Pepsi, Fruit Shoot and J20 brands in the UK, Europe and the US, also reported group profits before tax up 12.6% to £51M.

Increased to £4.5M​

The company’s architect and planning (A&P) investment increased by 14.6% to £4.5M for the period, as a result of the firm’s US expansion plans.

“This should be taken into account in relation to profit generation in half one and we anticipate it should benefit half two performance,”​ Carroll said.

Analysts predicted the US market would be a big driver for growth in the long term for Britvic, rather than in the short term, following the signing of a 15-year deal with PepsiCo in 2013.

However, the group has delayed the launch of its Fruit Shoot multipacks in the US from later this year until next year, Carroll added.

“This is not a big issue for us and the fact that many retailers carry out range reviews at the beginning of the calendar year seems to suggest that, logically, this was probably going to be the case anyway,”​ he said.

Challenging market conditions ​

Britvic’s chief executive Simon Litherland said: “Despite challenging market conditions, we have delivered double digit earnings growth, continued to improve our margin and further reduced debt. Importantly, we continue to increase A&P investment behind our brands, our innovation and marketing capability and in our international business unit, to further drive revenue and profit growth.”​

It was vital that Britvic maintained its margin growth over the year ahead, especially as the sector was moving into a deflationary period, Carroll said. “We expect further margin progress overall in full year 2015,”​ he added.