Britvic, the soft drinks manufacturer set to be acquired by Carlsberg, has posted robust annual results after investment in marketing and product innovation helped it maintain demand for its brands.
Over the year to 30 September, the company’s pre-tax profits climbed 10.5% to £173.2m despite a £21.3m hit related to the proposed Carlsberg deal. Adjusted EBIT increased 15.2% to £250.9m after margins rose 60bps to 13.2%, with revenue up 9.5% to £1.9bn.
Britvic stated that its growth was driven by both volume and price/mix, with strong demand for brands such as Pepsi, Tango, Lipton, MiWadi and Ballygowan
The group noted that scaling up new brands such as Plenish, Jimmy’s, Aqua Libra, and London Essence helped it build its presence in fast-growing categories. Meanwhile, it increased advertising and promotional (A&P) spend by 30.9% to “support long-term brand growth”.
Volumes grew 3.1%, driven by both organic growth and the acquisitions of the Extra Power and Jimmy’s brands.
Chief Executive Simon Litherland said: “We have delivered another excellent financial performance this year, with strong growth across our markets and portfolio of market-leading brands. We have also continued to ensure the business is fit for the future, adding more capacity, investing in our people, and significantly increasing investment in marketing and innovation.
Subject to approval by the regulatory authorities, the £3.3bn acquisition of Britvic by Carlsberg is expected to be completed in the first quarter of 2025. “I am confident that the prospects for our brands and people are extremely positive, and I look forward to them going from strength to strength,” concluded Litherland.
NAM Implications:
- Given the volume growth despite inflation-related price increases…
- …means Britvic avoided the challenges to the size of brand premia vs own label issues experienced by many major brands.
- Hopefully, the deal with Carlsberg will now go forward in early 2025…
- …and avoid any potential lowering of morale and loss of key people that could arise from undue delay.
