Britvic tastes mixed results as consumers go healthy
mixed sales results for 2006,citing a move to meet consumer demands
for healthier products as a revenue winner.
Britain's second largest soft drinks manufacturer took a hit in its carbonated products segment,which contributed to a 2.6 per cent fall in revenue for the year against 2005 results. For thefinancial year to 1 October, revenue fell £18.1m (€26.8m) to £677.7m (€1,004m) from £695.8m (€1,030m)in 2005.
However, full year cost saving targets of £10m, mainly realised in the second half of the year, helped the firm keep operating profit flat at£73.7m (€109m), a 0.5 per cent increase on the £73.3m reported in 2005. Margins fell to 10.5 percent in the financial year just ended from 10.9 per cent.
Still the full year's figures is a good sign for the company, which was forced to issue a profitwarning in May due to a poor first half performance. Britvic's chief executive officer Paul Moodysaid that despite the turnaround in the companies results for 2006, significant risks faced the company in the comingyear.
"The improved revenue trends seen in the second half have continued into the new financial year and have driven the group's tradingperformance over these early weeks," he said. " However given the volatility in the carbonates market we remain cautious on the outlook for this category. We are confident that in the year ahead we will continue to make progress on margins.
He added: "Britvic is well placed to benefit from the continuing consumer trend towards health and well-being and our new brand and product innovations, scheduled for launch in the first half of calendar 2007, remain focused on the growing stills category."
Britvic's largest segment, carbonated drinks, suffered a £24.4m fall in revenue to £332.5m in2006. The decline represents a 6.8 per cent fall against 2005 sales of £356.9m. Still the fullyear's figures is a good sign for the company, which was forced to issue a profit warning due to apoor first half performance.
The profit warning, issued in May, followed a 9 per cent fall inrevenues from carbonated drink sales, compared to the same period in 2005. The rebound to levelground for the full year, followed a boost in sales in the second half. The company cited a hot summer, the impact of the World Cup and a major new productlaunch, as the reasons behind the recovery.
The performance of the company's still drinks segment offset the poor sales results of its carbonatedproducts. Still drinks sales for the full financial year rose 2.4 per cent to £321.7m from £314.3m last year.
Britvic signed a contract with PepsiCo in 2004 for exclusive rights to distribute Pepsi and 7UP in the UK until2023.
