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Fizzing performance from Britvic

Cost-cutting and a new management structure should boost earnings at Britvic this year.
November 26, 2014

The past year has been one of huge organisational change for Britvic (BVIC). The UK's second largest soft drinks maker put together a new executive team, closed two UK factories and a depot and call centre in Ireland, and launched an international business unit to support overseas growth. The company also remains on track to deliver £30m in cost savings by 2016, the overwhelming majority of which will be found in the current financial year.

IC TIP: Buy at 680p

Amid this restructuring - and against a challenging trading environment - the group managed to increase sales, volumes and margins last year. That boosted adjusted operating profit by 18 per cent to £158m. The UK carbonates business performed well, increasing volumes by 4 per cent and sales by 6 per cent to £568m. Still drinks had a more challenging period. Chief executive Simon Litherland said growth in the division was "crucial" to the group's success and remained a priority. International sales grew 16 per cent to £58m, thanks to good progress with fruit shoot in the US and the fruit shoot launch in India.

Citi Research expects pre-tax profit of £147m and EPS of 46p this financial year, up from £133m and 42p.

BRITVIC (BVIC)
ORD PRICE:680pMARKET VALUE:£1.7bn
TOUCH:679-681p12-MONTH HIGH:784pLOW: 601p
DIVIDEND YIELD:3.1%PE RATIO:19
NET ASSET VALUE:34p*NET DEBT:£419m

Year to 28 SepTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20101.14-28.8-21.416.7
20111.2979.924.317.7
20121.2677.523.817.7
20131.3282.625.518.4
20141.34120.136.520.9
% change+2+45+43+14

Ex-div:04 Dec

Payment:06 Feb

*Includes intangible assets of £300m or 121p a share