Britvic, Tate & Lyle and Diageo post financial updates

By Rod Addy contact

- Last updated on GMT

Continued impact from the pandemic is expected, but Tate & Lyle proved buoyant
Continued impact from the pandemic is expected, but Tate & Lyle proved buoyant

Related tags: Drinks, Ingredients & nutrition, Finance

Out-of-home declines at Britvic offset sales growth in at-home products in its first quarter (Q1), Tate & Lyle's primary product sales rose in the three months to 31 December and Diageo reported dented interims.

On a comparable basis of constant currency and excluding the disposal of the French private label juice business, Britvic's global sales fell 5.8% on last year's Q1. In Great Britain, total revenue declined 4.1%, with strong At-Home growth of 11.9% offset by a decline of 32.5% in Out-of-Home. Sales in Brazil continued to grow strongly at 25.6%, whereas comparable revenue in the rest of the world fell by 19.3%.

The company said it anticipated a continued pandemic-related hit during the rest of 2021.

"Trading in the first quarter continued to be impacted by COVID-19 restrictions,"​ said chief executive Simon Litherland.

"Our portfolio of family favourite brands has however again performed well in the channels open to us, assisted by the additional flexibility we now enjoy as a result of investment in our GB supply chain. I remain very proud of how the Britvic team continue to respond with pace and agility to the changing landscape.

Diageo

Diageo reported net sales down 4.5% and an 8.3% drop in operating profit in the six months to 31 December, against the same period in 2019, with travel, tourism and on-trade substantially affected.

The business achieved good net sales growth in Turkey, Northern Europe and Great Britain, fuelled by the off-trade. Ireland. Beer net sales in Europe and Turkey declined 34%, driven primarily by Guinness, which was hit by on-trade restrictions and closures particularly in Ireland and Great Britain.

Scotch sales declined 10%. Growth of scotch in Turkey, Great Britain and Northern Europe was not enough to offset declines in Southern Europe, Travel Retail Europe and Eastern Europe, particularly for its Johnnie Walker brand. Baileys and ready-to-drink products grew 8% and 4% respectively driven by Great Britain, Northern Europe and Ireland.

Gin sales declined by 2%. Double digit growth in Gordon's in Great Britain and Tanqueray in Northern Europe was not enough to offset declines in Southern Europe and Diageo's Travel Retail Europe business.

Sales of Captain Morgan rum grew 7%, driven by Great Britain and Southern Europe.

Tate & Lyle

Meanwhile, Tate & Lyle reported robust trade in the three months to 31 December, with group revenue 8% ahead of the same period in 2019.

Revenue at its Food & Beverage Solutions unit increased by 8% supported by higher volume, good price and mix management and continued growth from new products.

Volume at its Primary Products business increased by 4%. Sweetener volume was higher than the comparative period, benefitting from strong operational execution, firmer demand and the phasing of some customer orders into the quarter.

However, sucralose sales were 3% down.

Industrial Starch volume was broadly in line with the comparative period as good demand for packaging offset continued weaker demand for printing and writing paper. In Commodities, strong revenue growth led to profit ahead of the comparative period as co-product recoveries, including from corn oil, were exceptionally strong. Overall, Primary Products revenue was 9% higher.

The company expected adjusted pre-tax profit for the full year to be slightly ahead of expectations.

'Strong performance and strategic progress'

Chief executive Nick Hampton said: “This was a quarter of strong performance and strategic progress. Food & Beverage Solutions and Primary Products both delivered top line growth supported by excellent operational execution and cost discipline. We announced two acquisitions in the quarter to strengthen our sweetener and texturant portfolios, our new business and innovation pipelines are robust, we are staying close to our customers and our productivity programme is delivering significant benefits.

"We were also proud to publish our first purpose report committing to ambitious ESG ​[environmental, social and governance] targets and showing how colleagues across the company are living our purpose. 

"While the operating environment remains uncertain and out-of-home consumption continues to be below pre-pandemic levels, the business has positive momentum. We remain focused on delivering our priorities and are well placed to emerge from this period an even stronger business.”

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