Britvic, the bottler of Pepsi and Tango, reported a 43 per cent slide in annual pre-tax profits to just £36.5 million after consumers continued to shun fizzy drinks.
Exceptional costs of about £19.1 million, relating to Britvic’s float last December, also dented today’s full-year results. Aside from the exceptionals, pre-tax profits at Britvic were flat against last year at £55.9 million.
As he delivered his first set of full-year results since leading Britvic as a quoted company, Paul Moody, the chief executive said he remained “cautious about the outlook” for the carbonated drinks market and would be redoubling his efforts to build up soft drink sales.
Britvic’s focus on new brand launches in water and the adult juice market had helped revenues from still drinks edge 2.4 per cent higher to £321.7 million for the year to the beginning of October, he said.
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But full-year revenues from carbonates tumbled 6.8 per cent to £332.5 million as Britvic continued to suffer from consumers’ increased thirst for healthier drinks.
Despite the profits fall, against £64.2 million last year, Mr Moody said Britvic had benefited from increased sales of still drinks, such as Pennine Spring water and Fruit Shoot H20. He also suggested that the slide in fizzy drink revenues was being stemmed. Carbonates revenues during the second half were down 4.7 per cent, against a 9 per cent drop in the first half.
“In the second half of our financial year we have achieved a marked improvement in our volume and revenue performance. We have maintained a sharp focus on [averaged realised prices], cost savings and cash management against the backdrop of a difficult carbonates market and continued growth in the stills market,” Mr Moody said.
However, today’s profits came after Mr Moody delighted investors in September with an upbeat trading statement, reporting that strong still sales had put it on track to make annual pre-tax profits of about £55 million.
This prompted Britvic’s shares to breach their 230p float price for the first time since the listing last December. Today, the shares edged 2.5p higher to 234.25p, despite a dip in group revenues and operating profits.
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Britvic has had a torrid year since the listing, telling investors three times since last December that fizzy drink sales were falling flat.
The shares have been buoyed more recently, however, by persistent takeover speculation . Permira, the private equity firm, abandoned a possible £600 million bid for Britvic early last month after its interest was flushed out by press reports.
Since then Britvic has been seen as a takeover candidate.