Strip out currency effects and half-year revenues from Britvic (BVIC) were broadly flat on the previous year. But a tight rein on costs and operating efficiencies still enabled the soft drinks manufacturer to book a double-digit increase in earnings.
Britvic, which counts Tango and Robinsons squash among its brands, posted a 22 per cent increase in operating profits to £61.3m. This result was slightly adrift of City forecasts, reflecting tough market conditions in the UK. Yet management retained its guidance for full-year operating profits of between £164-£173m, compared with £158m in 2014. Investec expects that to translate into adjusted EPS of 45.2p, against 41.5p for 2014.
Top-line growth is being checked by the supermarket price wars and commodity-price deflation, which are combining to drag down average prices at the checkout. Sales of Britvic’s carbonated beverages held up reasonably well, but revenues from the still drinks contracted by 4.4 per cent year-on-year.
A sharp reduction in cash balances pushed up unadjusted net debt significantly from the September year-end. The bulk of the borrowings are long-dated, and interim capital commitments are higher due to stock building ahead of the key summer period, but the level of debt remains a cause for concern.
| BRITVIC (BVIC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 744p | MARKET VALUE: | £1.8bn | |
| TOUCH: | 743-745p | 12-MONTH HIGH: | 788p | 601p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 29p* | NET DEBT: | £542m | |
| Half-year to 12 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 671 | 37.1 | 11.2 | 6.1 |
| 2015 | 650 | 49.7 | 15.3 | 6.7 |
| % change | -3 | +34 | +37 | +10 |
Ex-div: 28 May Payment: 10 Jul *Includes intangible assets of £281m, or 113p a share | ||||
