Britvic profits hit by �100m write-down
SOFT drinks group Britvic yesterday took at �100million hit from its ill-timed expansion into Ireland.
The Chelmsford-based company posted a bottom line annual pre-tax loss of �48.2m, following a �104.2m write-down in the value of its Irish operation to reflect its prospects amid the country’s current economic woes.
Britvic also disclosed that it is now conducting a strategic review of its operations in Ireland, a market it entered only in 2007 with the 250million euro acquisition of C&C Soft Drinks.
The company said economic problems in Ireland, which accounts for 13% of revenues, had led to consumers being more cautious and spending less on higher margin “on the go” drinks, opting instead to buy them in supermarkets and consume them at home.
At an underlying level, however, Britvic achieved a 22% increase its pre-tax profits, to �109.1m, in the 53 weeks to October 3, with its disappointing trading in Ireland being offset by an improved market share in the UK.
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Group-wide revenues rose 15% to �1.14billion, with Britvic selling 1.9billion litres of soft drinks during the year.
The company plans to pay a full-year dividend of 16.7p per share, up from 15p a year ago.
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Britvic, the UK’s second biggest soft drinks maker with brands including Robinsons, Tango and Fruit Shoot, said it had continued to pursue its strategy of promoting its leading brands, as well as launching new products and expanding further overseas.
It said that Pepsi, to which it owns sales rights in the UK and Ireland, had continued to grow its share of the cola market, following the introduction of a new 600ml bottle for its sugar-free varieties.
Robinsons maintained its position as the country’s number one squash brand, while Fruit Shoot continued to be the top children’s drink, it said.
Innovations during the year included launching US brand Mountain Dew as an energy drink in the UK. It also expanded further into mainland Europe through the acquisition of Fruite Entreprises, now known as Britvic France, in May.
Britvic warned that the uncertain consumer environment looked set to continue during 2011.
But chief executive Paul Moody said: “Britvic has again demonstrated its ability to grow the business despite the difficult conditions in the wider economy.
“The group’s extensive brand innovation plans, combined with satisfactory trading in the first few weeks of the new financial year, mean we are in good shape to deliver another robust set of results for the year ahead.”