Britvic interim profit up, on track to deliver on FY earnings guidance

FTSE 250 soft drinks company Britvic posted an increase in interim profit amid growing revenue, and said it was on track to meet its earnings guidance for the year.

In its interim results for the 28 weeks ended 10 April, the company said pre-tax profit rose 7.3% to £54.5m on revenue of £678m, up from £650.3m in the same period last year.

Earnings before interest and taxes increased to £65.4m from £63.2m, while earnings before interest, tax, and amortisation were up 7.1% to £69m.

Consensus estimates had been for sales of £677m and EBIT of £66m.

The company lifted its interim dividend by 4.5% to 7.0p per share and reiterated its guidance for full-year earnings before interest, tax and amortisation of between £180m and £190m.

Chief executive Simon Litherland said: “We have outperformed the soft drinks category in each of our core markets, gaining market share as a result. Our recent acquisition in Brazil is growing ahead of last year and Fruit Shoot multi-pack is being launched in the USA.

“We continue to invest behind the longer term drivers of growth - supply chain efficiency in GB, innovation and our international businesses - and I remain excited about our ability to drive sustainable revenue growth in the years ahead.”

Strategic highlights in the period included a new seven-year deal with Subway in Great Britain for both Britvic and Pepsi brands from June and new production line and warehousing at the company’s Leeds facility becoming operational.

Britvic said it was well placed to respond to the soft drinks tax announced in the March 2016 Budget.

“While we are disappointed with the decision and believe a holistic approach is necessary to tackle obesity, Britvic is well placed to respond as we have been building our portfolio of 'Better for You' soft drinks for some time,” it said.

The group said that as currently proposed, 66% of its volumes fall below the proposed tax bands.

The new tax, which is due to come into effect from 2018, will mean drinks with 5g of sugar per 100ml will face a lower tax, while those with over 8g per 100m will face a higher tax.

Societe Generale said this was a solid set of results, “which crucially begin to demonstrate the success of Fruit Shoot in the US with successful listing in large-US stores”.

“Britvic is making good progress in reformulating its products in light of the UK sugar tax plans, with the innovation pipeline weighted toward lower sugar and nutritionally enhanced brands," it added.

At 1405 BST, Britvic shares were down 0.4% to 700p.