During the six months to mid-April, Britvic (BVIC) enjoyed a 1.9 per cent uptick in organic sales – excluding currency movements and the impact of the UK’s soft drinks industry levy (SDIL). For management, such (albeit meagre) expansion reflected disciplined revenue management and innovation. In turn, organic adjusted operating profits rose by 5 per cent to £83.7m.
As Britvic anticipated, SDIL – which was introduced last April – has engendered a “reformulation” across its soft drinks category in Great Britain, driving consumers toward low- and no-sugar beverages. Within ‘GB carbonates’, volumes declined by 4.5 per cent to £647m – reflecting a tough comparative, with stock-loading ahead of the introduction of the levy last year. Pepsi MAX and other healthier alternatives saw strong volume growth, while sugary variants slipped. Still, overall, sales here climbed by around a tenth to £327m – helped by an increase in average revenue per litre sold.
In ‘GB Stills’, volumes edged up 0.8 per cent to £174m – helped by J20, Lipton Ice Tea and the Robinsons Creations and Cordials ranges, and tempered slightly by a dip in Fruit Shoot volumes. More broadly, the group enjoyed “organic brand contribution growth” – pertaining to revenues less certain costs – across all its geographies.
Britvic has increased its inventories to cater to the possibility of a no-deal Brexit. At the period-end, this figure sat at £157m – up 8.6 per cent.
Consensus forecasts are for adjusted EPS of 58.4p in FY2019, against 56.3p in FY2018.
| BRITVIC (BVIC) | ||||
| ORD PRICE: | 935p | MARKET VALUE: | £2.48bn | |
| TOUCH: | 934.5-935p | 12-MONTH HIGH: | 969p | LOW: 741p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 130p* | NET DEBT: | £705m | |
| Half-year to 14 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 733 | 41.8 | 12.6 | 7.9 |
| 2019 | 769 | 45.2 | 13.2 | 8.3 |
| % change | +5 | +8 | +5 | +5 |
| Ex-div: | 30 May | |||
| Payment: | 12 Jul | |||
| *Includes intangible assets of £425m, or 160p a share | ||||
