Better-than-expected profits at Britvic (BVIC) provided much-needed refreshment for City number-crunchers baking in a mini-heat-wave. Revived by management’s undiluted confidence in making full-year operating profit of £148m-£156m, they chased shares in the drinks company 5 per cent higher.
Broker Panmure Gordon is “comfortable” with its forecasts for 17 per cent profit growth this year, giving EPS of 41.3p (from 35.2p). That’s unsurprising, given that Britvic did just that in the first six months, raising adjusted earnings to 14.5p per share. Its UK fizzy-drinks business - which delivered double-digit revenue growth in the second quarter - and France were the key drivers behind a 4 per cent increase in soft-drink volumes to over 1bn litres. The group increased prices, too, and the underlying operating-profit margin rose 60 basis points to 9 per cent.
A new strategy dreamt up by chief executive Simon Litherland a year ago will feed through more rapidly in the second half. Factories have been shut, production lines shifted and Fruit Shoot is now available in the US coast to coast - setting Britvic on track to cut costs by £30m a year by 2016.
BRITVIC (BVIC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 728p | MARKET VALUE: | £ 1.8bn | |
| TOUCH: | 726-730p | 12-MONTH HIGH: | 784p | Low: 460p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 27 | |
| NET ASSET VALUE: | 18p* | NET DEBT: | £505m | |
| Half-year to 13 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 639 | 32.8 | 10.2 | 5.4 |
| 2014 | 671 | 37.1 | 11.2 | 6.1 |
| % change | +5 | +13 | +10 | +13 |
Ex-div: 28 May Payment: 11 Jul *Includes intangible assets of £314m, or 127p per share | ||||
