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Britvic's turnaround gathers pace

RESULTS: Beverage maker Britvic has cut back its debt pile and has ended the period with both decent sales and profit growth
November 26, 2013

Higher pricing helped beverage maker Britvic (BVIC) to secure revenue growth (at constant exchange rates) of 4.4 per cent last year. But volumes ended the year 0.4 per cent lower as the group faced headwinds in its troubled Irish market and felt the impact of last year's Fruit Shoot recall - which limited stock availability.

IC TIP: Hold at 635p

But a 5.4 per cent overall rise in pricing, coupled with a stronger focus on promotions and cost savings, helped the operating margin to rise 120 basis points to 10.4 per cent - resulting in an 18.4 per cent rise in group operating profit to £137.9m. Meanwhile, free cash flow jumped 67 per cent to £104m, (before dividend payments and exceptional items), which helped the group to cut net debt by £54m - leaving the adjusted net debt-to-cash profits ratio down to 2.2 times from 2.8 times and meaning that Britvic has already hit its 2014 debt targets. Overseas, Fruit Shoot is to be rolled out to 41 US states next year, from 32; it's now on sale across Spain and will reach Indian consumers by mid-2014.

Broker Panmure Gordon expects EPS of 40.9p for 2014 (from 34.68p in 2013).

BRITVIC (BVIC)
ORD PRICE:635pMARKET VALUE:£1.6bn
TOUCH:634-636p12-MONTH HIGH:642pLOW: 383p
DIVIDEND YIELD:2.9%PE RATIO:25
NET ASSET VALUE:17p*NET DEBT:£458m

Year to 29 SepTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20090.9866.221.815.0
20101.14-28.8-21.416.7
20111.2979.924.317.7
20121.2677.523.817.7
20131.3282.625.518.4
% change+5+7+7+4

Ex-div: 4 Dec

Payment: 7 Feb

*Includes intangible assets of £317m, or 129p a share