May 23 2013 Latest news:
Tuesday, November 27, 2012
SOFT drinks company Britivic confirmed a slide in profits today following the recall earlier this year of newly-designed bottles for its Fruit Shoot products.
Britvic, which also owns the Robinsons, J20 and Tango brands, reported a 19% fall in profits for the year to September 30 to £84.4million.
The decline relected a £16.9m hit to cover the cost of recalling bottles of the children’s drink and spin-off Fruit Shoot Hydro in July due to safety concerns over faulty caps.
However, Britvic, which recently agreed a £1.4billion merger with Irn-Bru owner AG Barr, said it was on track to achieve production levels in line with historical demand by January 2013 as previously hoped.
For the year to September, total group volume was 2.1bn litres, down 1.6% on last year, while revenue was 0.8% down to £1.3bn.
The reduction in revenue was also primarily due to the Fruit Shoot recall which hit the group’s still drinks performance in the UK, France and other International markets. The product recall impacted revenues by around 2%, Britvic said.
The fizzy drinks division in the UK, which includes a lincence to produce Pepsi products, was hit by greater competitive activity in the period. However, Britvic did increase its share of the soft drinks market.
Britvic, which recently relocated its head office from Chelmsford to Hemel Hempstead but still has a factory at Widford, just outside Chelmsford, and others at locations including Norwich, kept its full-year dividend unchanged at 17.7p.
It has also proposed a special interim dividend of 10p per share, conditional upon the merger with AG Barr becoming effective.
Paul Moody, Britvic chief executive, said: “This has been a difficult year for the group and the progress that we made was more than offset by the impact of the Fruit Shoot product recall.
“Additionally, the negative macro-economic trends, leading to weak consumer confidence and the cold, wet summer endured across most of our markets, weighed heavily on the soft drinks market and Britvic within it.”
The Britvic and AG Barr merger was agreed earlier this month and will lead to the creation of one of Europe’s leading soft drinks firms with annual sales of more than £1.5bn.
Britvic shareholders will own 63% of the new company, to be called Barr Britvic Soft Drinks, with AG Barr holding the rest. The deal is still subject to shareholder approval.
Wayne Brown, an analyst at Canaccord Genuity, said while the results from Britvic were ahead of expectations this “should not cloud what has been a poor year for the group”.