Britvic Plc (LON:BVIC) has seen its shares jump in early trading Wednesday after its half-year revenues rose in the first half of the year, however charges from its ongoing business capability programme caused pre-tax profits to fall by over 10%.
The FTSE 250 soft drinks maker, whose brands include Robinsons and Tango, reported revenues for the period had increased 4.5% to £733.2mln, up from £701.3mln last year, while pre-tax profits for the period declined 13.7% to £33.3mln from £38.6mln.
READ: Britvic goes flat as uncertainty over sugar tax offsets slight first-quarter revenue growth
The decline in profits included £21.6mln in planned costs for the company’s business capability programme, through which the company is hoping to achieve a minimum 15% return on its earnings before interest, tax, depreciation and amortisation (EBITDA) by 2020, and includes plans to shutter the company’s Norwich facility in late 2019.
Across its divisions, the firm saw 9.1% and 13.1% revenue growth in its British carbonates and Irish markets respectively on a constant currency basis, however it saw declines in other areas, with its markets in British still drinks, France, Brazil, and other international revenues shrinking by 4.4%, 3%, 5.8%, and 6.5% respectively.
The results have beaten the expectations of analysts at City broker Numis, who had forecast a revenue rise of 3.5%, while also predicting that adjusted earnings per share (EPS) would be flat at 18.8p, while in actuality Britvic’s adjusted EPS increased 12.2% to 21.2p.
In its outlook, Britvic chief executive Simon Litherland said the group remained confident of making further progress during the year.
He added: "We have delivered a strong first half performance with solid revenue, margin and earnings growth. We have also made good progress in innovating to meet consumer needs, growing our international presence and transforming our supply chain.
“While it is too soon to guide on the ongoing consumer impact of the soft drinks levy, early indications of the competitor and customer response are broadly as we anticipated. We have exciting commercial plans in place for the second half and I remain confident of continuing to make progress this year."
Britvic shares were up 7.5% at 815.5p.