Half-year figures from drinks group Britvic (BVIC) were overshadowed by big restructuring plans. Reaction was mixed, with some City analysts saying it reflects AG Barr's (BAG) strategic priorities - the pair are engaged in a currently stalled merger. While others believe Britvic could be making a case for a stand-alone future.
Specifically, Britvic is targeting £30m of cost savings by 2016. This includes closing two UK factories and transferring some Fruit Shoot capacity to France. The UK and Irish operations are to be combined and staff headcount will fall 10-15 per cent, with the savings used to invest in the international business - the US, Europe and now India, where Britvic has teamed up with Narang to distribute Fruit Shoot in 2014.
Operationally, meanwhile, underlying half-year performance was lacklustre and volumes fell across all categories. Group trading profit grew 27.6 per cent to £53.6m, but this largely reflected higher pricing and reduced marketing spend. Trading was particularly tough in the GB stills unit and in Ireland, where revenue fell 3 per cent and 5.5 per cent, respectively. International sales, though, rose 25 per cent to £18m - helped by the reintroduction of Fruit Shoot to European markets and strong US growth.
Canaccord Genuity expects full-year pre-tax profit of £99.6m, giving EPS of 29p (from £84.4m and 24.5p in 2012).
| BRITVIC (BVIC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 518p | MARKET VALUE: | £1.26bn | |
| TOUCH: | 517-519p | 12-MONTH HIGH: | 519p | LOW: 250p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 0.25p* | NET DEBT: | £594m | |
| Half-year to 14 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 641 | 24.1 | 7.7 | 5.3 |
| 2013 | 639 | 32.8 | 10.2 | 5.4 |
| % change | - | +36 | +32 | +2 |
Ex-div: 29 May Payment: 12 Jul *Includes intangible assets of 319p, or 131p a share | ||||
