Join our community of smart investors

British summer blights Britvic

Britvic blames a tough fourth quarter on the infamous British summer weather
November 25, 2015

The final quarter for drinks company Britvic (BVIC) was a tough one, but it didn't stop the group reporting adjusted operating profits of £169m - 7 per cent higher than last year and £3m ahead of consensus expectations. Adverse currency movements, strong competition and disappointing summer weather across Great Britain and Ireland led to a 3.3 per cent slip in revenues at actual exchange rates. But a close eye on costs and growth in cash profit margins to 13.2 per cent lifted cash profits by 7 per cent as well, to £172m.

IC TIP: Buy at 712p

The UK stills division, which produces the J20 and Fruit Shoot brands, fared particularly badly last year, as a drop in volumes and average revenue per litre sold contributed to a 4.1 per cent decline in sales. But warm summer weather in France managed to offset most of that decline as volumes grew 5.6 per cent, revenues rose 4.2 per cent and margins increased more than 5 percentage points to 31.5 per cent.

Analysts at Citi expect pre-tax profits of £161m for the year ending September 2016, giving EPS of 47.9p compared with £147m and 45.7p in FY2015.

BRITVIC (BVIC)
ORD PRICE:712pMARKET VALUE:£1.86bn
TOUCH:712-713p12-MONTH HIGH:788pLOW: 632p
DIVIDEND YIELD:3.2%PE RATIO:17
NET ASSET VALUE:81p*NET DEBT:157%

Year to 27 SepTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20111.2979.924.317.7
20121.2677.523.817.7
20131.3282.625.518.4
20141.3412036.520.9
20151.3013841.823.0
% change-3+15+15+10

Ex-div: 3 Dec

Payment: 5 Feb

*Includes intangible assets of £305m, or 117p a share