Britvic (BVIC) chief executive Simon Litherland said that the drinks company has entered the final phase of its “business capability programme” which overhauled its production facilities. The site in Norwich is set to close late next year, leaving production facilities in London, Leeds and Rugby. Mr Litherland said this should make the company more efficient and better able to meet changes in consumer tastes. As a result, cash flow is expected to tick up by between £70m and £80m per year from 2019 as capital expenditure eases.
The reported period only includes one week of sales affected by the UK’s sugar tax, so it’s too soon to gauge the full impact. Encouragingly, reduced sugar products have performed well. Mr Litherland called Pepsi Max the “standout performer”, while Robinsons fruit drinks returned to sales growth in the second quarter. This helped boost UK revenue by 4.6 per cent to £425m. But after-tax profit fell 13.7 per cent to £33.3m, mainly due to spending on the production overhaul, along with a £3.3m bad debt provision on the now collapsed Palmer & Harvey. Mr Litherland said the distributor’s collapse had been absorbed by other wholesales, so it shouldn’t have a long-term impact on Britvic.
Analysts at Mirabaud expect EPS of 38.5p in the year to September, compared to 42.4p in FY2017.
| BRITVIC (BVIC) | ||||
| ORD PRICE: | 806p | MARKET VALUE: | £2.13bn | |
| TOUCH: | 806-807p | 12-MONTH HIGH: | 839p | LOW: 658p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 120p* | NET DEBT: | £638m | |
| Half-year to 15 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 701 | 50.1 | 14.7 | 7.2 |
| 2018 | 733 | 41.8 | 12.6 | 7.9 |
| % change | +5 | -17 | -14 | +10 |
| Ex-div: | 31 May | |||
| Payment: | 13 Jul | |||
| *Includes intangible assets of £431m, or 163p a share | ||||
