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Britivic faces headwinds despite 5% increase in earnings

The make of Robinsons squash reported adjusted earnings (EBITDA) of £195.5mln but said levy on soft drinks creates uncertainty
picture of soft drinks
Britvic notes that the soft drinks tax in Britain and Ireland would have a negative impact on the sector

Britvic Plc (LON:BVIC) has warned that the introduction of a soft drinks tax in Britain and Ireland would create uncertainties in the sector as it reported a 5.1% rise in full-year adjusted core earnings.

The Robinsons squash maker reported adjusted earnings (EBITDA) of £195.5mln for the 52 weeks to October 1, up from £186.1mln in the 53 week period a year earlier, on revenue  of £1.541bn, up 7.7% at actual exchange rates and 2.5% at constant rates.

READ: Britvic is shutting Norwich manufacturing, cutting 242 jobs from the site

However, the FTSE 250 listed firm’s profit after tax decreased by 2.5% to £111.6mln, including £24.7mln of planned costs related to its business capability programme.

Simon Litherland, Britvic’s chief executive officer commented: "Britvic  has again demonstrated the resilience of our business, delivering another strong set of results.”

He added: “ I am particularly encouraged that we have increased the proportion of revenue generated from innovation and accelerated the returns from the business capability programme.”

Uncertainties ahead

The CEO added: “While April 2018 brings uncertainty with the introduction of the Soft Drinks Industry Levy in GB and Ireland, we are well placed to navigate it thanks to the strength and breadth of our brand portfolio and our exciting marketing and innovation plans.

“This, combined with our continued focus on revenue and cost management, means we remain confident of making further progress next year."

The group is to pay a full year dividend of 26.5p, up 8.2% from the 24.5p paid a year earlier.

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