Britvic interim revenue and earnings jump

Drinks maker Britvic posted a jump in interim revenue and earnings but a drop in pre-tax profit on Wednesday as it expressed confidence over the rest of the year.

In the 28 weeks to 15 April, revenue was up 4.5% to £733.2m, while adjusted earnings before interest and taxes were 9.4% higher at £80.5m. However, pre-tax profit for the half fell to £41.8m from £50.1m in the same period a year ago as it incurred costs of £21.6m from its planned business capability programme.

The company, whose brands include Robinsons, Fruit Shoot and J2O, said it saw strong growth in the second quarter, overcoming poor weather in GB, Ireland and France.

Britvic said it entered the soft drinks industry levy environment in GB with strong momentum, with Robinsons back in growth and Pepsi MAX continuing to outperform a highly competitive cola category.

But the company pointed out that the interim results include just one week of sales data following the introduction of the levy, so it remains too soon to judge the consumer response and guide on the ongoing impact.

"However, we have worked closely with customers ahead of the levy introduction to ensure soft drinks shelf and feature space is maintained. We are beginning to see an increased focus on low and no sugar brands, where Britvic has an advantaged portfolio, due to our long-standing reformulation and innovation programme. Recent competitor reformulation and promotional strategy appears, at this stage, to be broadly as we anticipated."

GB Carbonates saw revenue rise by 9.1% in the half, while volume was up 5.1%. Revenue in GB Stills fell 4.4%, with a 2.5% decline in volume.

In terms of countries, France saw revenue fall by 3% at constant exchange rates and volume down 3.9%, but Ireland was a bright spot, with revenue there up 13.1% thanks to the acquisition of East Coast.

International reported revenue was down 6.5%, with volumes down 1.6%, mostly due to the Benelux and Travel & Export channels.

Britvic said the US business is making progress, with Fruit Shoot winning a listing in Dollar General at the end of last year, although revenue in the US declined due to the timing of concentrate shipments.

Chief executive officer Simon Litherland said: "We have delivered a strong first half performance with solid revenue, margin and earnings growth. We have also made good progress in innovating to meet consumer needs, growing our international presence and transforming our supply chain. While it is too soon to guide on the ongoing consumer impact of the soft drinks levy, early indications of the competitor and customer response are broadly as we anticipated. We have exciting commercial plans in place for the second half and I remain confident of continuing to make progress this year."

Shore Capital said: "Overall, a good set of number from Britvic and encouraging signs as it enters H2 especially if current weather conditions continue. We note the period did have a number of exceptionals mainly relating to the BCP programme with acquisition amortisation now also included as an adjusting item.

"This is understandable and we hope that exceptionals post the end of the programme also end aside from the acquisition amortisation and fair value moves on hedges."

At 0818 BST, the shares were up 2.8% to 779.50p.