Profits up at Britvic but Market Conditions Remain Tough

19 May 2016 --- Britvic chief executive Simon Litherland hailed the soft drinks company as outperforming “the soft drinks category in each of our core markets" as it reported a 6.9 percent uplift in year-on-year quarterly profits to £54.5m ($80m).

Pre-tax profits were up from £51m ($74m) to £54.5m ($80m) while revenues were up from £650.3m ($952m) to £678m ($993m) over the year in the quarter ending April 10.

However, the maker of brands including Ballygowan and Robinson's fruit juice said that trading conditions in the key markets of GB, France and Ireland remain "difficult" and, with the exception of Ireland, are not improving.

Litherland said: "We have reported a 7.1% increase in EBITA in the first half of the year despite the challenging customer environment and continued price deflation in our core markets. We have outperformed the soft drinks category in each of our core markets, gaining market share as a result. Our recent acquisition in Brazil is growing ahead of last year and Fruit Shoot multi-pack is being launched in the USA."

"We continue to invest behind the longer term drivers of growth - supply chain efficiency in GB, innovation and our international businesses - and I remain excited about our ability to drive sustainable revenue growth in the years ahead. With the key summer trading period ahead of us, strong marketing plans for the rest of the year and continued cost control, we remain on-track to deliver EBITA in the range of £180m ($263m) to £190m ($278m) for the full year.”

Across carbonate sales in GB, revenues were up from £287m ($420m) to £294m ($431m), helped by a strong performance from Pepsi- which it markets in the UK on behalf of PepsiCo.

There was also a "significant" performance from "on the go" packs while the no-sugar Pepsi Max variant also performed strongly.

Across the still market in GB, revenues were down from £160m ($234m) to £148m ($217m) in the period, as flagship brand Robinsons underperformed the market after it removed added sugar variants from its portfolio.

Robinsons has also been adversely affected by an increase in price promotion activity in response to aggressive pricing from own-label competitors who in turn are responding to discounter pricing.

The overall performance of Fruit Shoot also declined in the period.

Also in the stills category, Britvic is relaunching its adult juice drink Drench later this with a lower sugar formulation.

Britvic said: "As consumer trends move to “Better for You” products, our broad stills portfolio combined with our innovation programme is well positioned to capitalise on the future growth opportunities."

In Ireland revenues were up from £62m ($91m) to £63m ($92m), helped by growth in still brands Ballygowan and Miwadi.

But in France revenues were down from £118.6m ($174m) to £108.6m ($166m) amid a general decline in the take-home soft drinks market.