Britvic (BVIC) is bracing for the impact of the new UK sugar tax due to come into effect from April next year. But chief executive Simon Litherland is intent on highlighting the “resilience” of the drinks company, arguing it can deal with the changes thanks to “the strength and breadth" of the brand portfolio. That does look to be the case, particularly in terms of geographical spread. Around 41 per cent of revenue is generated outside the UK, with international revenue up 13.5 per cent in the last year. The acquisition of Brazilian drinks maker Bela Ischia is also complete, helping further extend Britvic’s presence overseas.
Another part of the strategy includes focusing on low or no-sugar options in carbonated beverages, like its Pepsi Max product. It was a tough year for still drinks due to increased competition and poor weather causing a “worse than expected” fourth quarter. But while adjusted cash profit margins fell by 30 basis points to 12.7 per cent, this could have been worse had it not been for price increases offsetting cost inflation.
Analysts at Numis suspect upgrades could be on the horizon. The brokerage previously expected pre-tax profits of £172m for the year to September 2018, giving EPS of 51.6p (2017: 52.9p).
| BRITVIC (BVIC) | ||||
| ORD PRICE: | 803p | MARKET VALUE: | £ 2.12bn | |
| TOUCH: | 803-804p | 12-MONTH HIGH: | 823p | LOW: 521p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 129p* | NET DEBT: | 174% | |
| Year to 1 Oct | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 1.32 | 82.6 | 25.5 | 18.4 |
| 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 | 1.54 | 139 | 42.4 | 26.5 |
| % change | +8 | -9 | -3 | +8 |
| Ex-div: | 07 Dec | |||
| Payment: | 05 Feb | |||
| *Includes intangible assets of £455m or 172p per share | ||||
