Shares in Britvic (BVIC) enjoyed a decent mark-up on release of the full-year numbers to September, which revealed considerable growth despite “a challenging environment”. Hurdles facing the drinks group included the introduction of the soft drinks industry levy (SDIL), a temporary shortage of carbon dioxide in Great Britain and Ireland and the effects of business failures within Britvic’s customer-base. Still, the top line benefitted from 2.7 per cent organic momentum, which was sustained further down the P&L, with comparable levels of pre- and post-tax earnings growth.
Regionally, only France and Brazil endured revenue declines; the former by 4.3 per cent to £269m, the latter by 2.8 per cent to £120m. But despite a backdrop of macro-uncertainty, Brazil still achieved a 1.8 percentage-point increase in its brand contribution margin. Elsewhere, Great Britain enjoyed higher sales for both carbonates and stills – up 10 per cent and 4.2 per cent respectively. Pepsi, particularly Pepsi MAX, continued to garner market share, buoyed by the rising popularity of non-sugar alternatives post-SDIL.
Meanwhile, investment in Britvic’s business capability programme – entailing a restructuring of the supply chain and operations – is drawing to a close. Management expects free cash flow to “increase materially” in 2019 as capital expenditure shrinks to normal levels.
According to Bloomberg, analysts expect adjusted EPS of 56.9p in FY2019, rising to 61.3p the following year.
| BRITVIC (BVIC) | ||||
| ORD PRICE: | 820p | MARKET VALUE: | £ 2.2bn | |
| TOUCH: | 819-820p | 12-MONTH HIGH: | 844p | LOW: 658p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 143p* | NET DEBT: | 175% | |
| Year to 30 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 1.34 | 120 | 36.5 | 20.9 |
| 2015 | 1.30 | 138 | 41.8 | 23.0 |
| 2016 | 1.43 | 152 | 43.8 | 24.5 |
| 2017* | 1.43 | 139 | 42.4 | 26.5 |
| 2018 | 1.50 | 146 | 44.4 | 28.2 |
| % change | +5 | +5 | +5 | +6 |
| Ex-div: | 06 Dec | |||
| Payment: | 04 Feb | |||
| *2017 number restated for IFRS 15**Includes intangible assets of £440m or 166p a share | ||||
