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Britvic bottles up revenue growth

The UK drinks maker reported revenue growth in the first half despite a challenging market environment
May 24, 2017

Despite what management called a "challenging" environment due to rising cost inflation and weak sterling, UK drinks maker Britvic (BVIC) delivered revenue growth across all its markets. The group sold more than 1bn litres of soft drinks during the first half, 2 per cent more than in the comparative period, with the average realised price up 1.5 per cent on a constant currency basis, suggesting that its customers are buying despite inflation's squeeze on spending power.

IC TIP: Buy at 721p

The group acquired Brazilian drinks maker Bela Ischia in March this year with the aim of expanding its geographical footprint in Latin America's largest economy. The integration of Bela Ischia is on track to deliver R$10m (£2.4m) in cost synergies. But macroeconomic challenges in the region made for a difficult period. Although regional revenue was up 4 per cent on the back of price increases to offset cost inflation, organic volume fell by 10 per cent, and the margin narrowed as these price increases were gradually phased in.

Analysts at Whitman Howard expect pre-tax profits of £166m for the September 2017 year-end, giving EPS of 51p, up from £163m and 49p in FY2016.

BRITVIC (BVIC)
ORD PRICE:721pMARKET VALUE:£1.9bn
TOUCH:720-721p12-MONTH HIGH:721.5pLOW: 521p
DIVIDEND YIELD:3.4%PE RATIO:17
NET ASSET VALUE:104p*NET DEBT:266%

Half-year to 16 AprTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201667853.915.57.0
201775650.114.77.2
% change+12-7-5+3

Ex-div: 1 Jun

Payment: 14 Jul

*Includes £458m of intangible assets, or 174p a share