iNVEZZ.com, Tuesday, November 26: Shares in Britvic (LON:BVIC) rose more than five percent this morning after the soft drinks group reported robust full-year earnings and announced an agreement with PepsiCo to further expand its Fruit Shoot brand in the US. Britvic’s share price hit an all-time high of 641.5p this morning, but lost some ground to trade at 629p as of 10:51 UTC, up 3.6 percent from yesterday’s close.
Trade these shares now through Hargreaves Lansdown from £5.95 per deal.
Earnings top estimates
Britvic, which manufactures and distributes brands such as Robinsons, J2O, Fruit Shoot, Tango and Drench in Britain, said its adjusted earnings per share rose 27.5 percent year-on-year to 35.2p for the year ended September 29, ahead of a consensus estimate of 33.62p in a Reuters poll of 14 analysts. The company’s full-year revenue grew 4.4 percent to £1.322 billion, slightly higher than the forecast £1.319 billion. Revenue growth was driven by a 5.4 percent growth in average realised prices, as well as by a recovery of the Fruit Shoot brand, which was hit by a recall in the UK due to safety concerns over the bottles’ plastic caps in July 2012. The company said that Fruit Shoot’s take-home market share has returned to pre-recall levels as of the end of September.
EBITA (earnings before interest and tax) rose 18.4 percent to £137.9 million with all business units delivering pricing and brand contribution margin growth that boosted the EBITA margin by 120 basis points to 10.4 percent. A strong free cash flow generation of £103.5 million has helped reduce adjusted net debt by 9.9 percent to £402.3 million and backed a dividend hike. The board proposed a final dividend of 13p, resulting in a full-year dividend of 18.4p which is four percent higher than last year.
“We have made good progress on the strategic initiatives that we communicated back in May and remain on-track to deliver £30m per annum of cost savings from 2016,” CEO Simon Litherland said in a statement. About £10 million of those savings will be spent on pursuing international growth opportunities.
Britvic said it has signed a 15-year exclusive bottling agreement with PepsiCo Americas Beverages (PAB) for both expanded distribution and additional manufacturing capacity. Under the new deal, the UK company will see Fruit Shoot distributed in 41 US states next year, up from 32 currently.
Looking ahead, Britvic expects the consumer environment to remain challenging next year. However, it saw trading in the new fiscal year starting slightly ahead of a strong first quarter performance last year and is confident of delivering a full-year EBIT of between £148 million and £156 million, up from £135 million for 2012/13.
Britvic is the largest supplier of branded still soft drinks and the number two supplier of branded carbonated soft drinks in in the UK. It is also a major player in Ireland and France and is working on growing in other territories through franchising, export and licensing.
As of 10:39 UTC buy Britvic shares at 630.00p.
As of 10:39 UTC sell Britvic shares at 629.00p.
Trade stocks with Hargreaves Lansdown from £5.95 per deal.
Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.