Britvic Plc (LON: BVIC) have seen their shares climb despite a 25% plunge in annual profit, as the firm alluded to a write down of French assets.
Britvic Plc is a British drinks manufacturer having a portfolio of brands including Robinsons, Tango, J2O, drench, MiWadi, Ballygowan, Teisseire, Fruité, Maguary and DaFruta. I
In addition, in Great Britain and Ireland, the company produces and sells a number of PepsiCo’s famous soft drinks brands, including Pepsi, 7UP, SoBe and Mountain Dew, under exclusive agreements with PepsiCo (NASDAQ: PEP).
Shares of Britvic climbed 0.81% to 993p. 27/11/19 11:10BST.
Profit before tax sank 24.3 per cent to £110.3 million for the year to the end of September after Britvic struggled with a new law in France and wrote down £31.2 million in local assets.
Additionally, revenue climbed 2.8% year on year to £1.55 billion, and the firm also cut net debt by £9.4 million to £575.5 million.
The FTSE250 (INDEXFTSE: MCX) listed firm saw their basic earnings per share sink too 30.6p.
Britvic blamed its profit slump on “a challenging year” in France following the introduction of a law designed to force companies to improve suppliers’ pay.
This in turn has caused prices to increase for Britvic, which contributed to falling sales.
The firm also wrote down £31.2 million in value for three juice manufacturing plants as it looks to sell these to rival Refresco.
Chief Executive Simon Litherland said “I am pleased to report that Britvic has once again delivered a strong performance, with good momentum in our key brands and categories. In 2019 we have increased revenue, adjusted margin and earnings before interest and taxes, as well as significantly improving free cashflow generation”.
“Our commercial execution, innovation agenda and revenue management continue to deliver results. Our transformational business capability programme is now complete – and importantly forms a key part of our broader commitment to building a more flexible and sustainable business model going forward”.
“Building on this strong platform, I am confident that Britvic is well placed to capitalise on the future growth opportunities in the years ahead. While we anticipate conditions to remain challenging, we fully expect that we will make further progress in 2020”.
Chris Daly, chief executive of the Chartered Institute of Marketing, credited the firm’s refreshed marketing strategy for Robinsons with pushing UK revenue higher.
“The FTSE 250 company has a refreshed strategy focusing on key categories for growth including the launch of new products in the adult soft drink market,” he added, citing a marketing push for Pepsi Max.
“Although Coca-Cola (LON: CCH) has long been synonymous with the festive period, retailers may yet be persuaded to give Britvic’s cola brand a larger share of shelf space.”
