Britvic has reported disappointing first-half figures after the pandemic restrictions heavily impacted its performance. However, the British firm is hopeful of better times ahead as socialising increases over the summer and bleary-eyed commuters buy its energy drinks as they start returning to the office.
Over the six months to 31 March, Britvic’s total revenue fell 6.3% on a constant currency basis to £617.1m. Adjusted EBIT decreased 15.4% to £60.1m, whilst pre-tax profit slipped 14.7% to £33.2m.
In the UK, volumes declined 6.1% and revenue was down 4.8%, driven by the closure of hospitality venues and lower mobility levels reducing on-the-go consumption of its smaller pack formats. However, in the At-Home channel, Britvic delivered 11% revenue growth and gained market share, with demand remaining strong for larger value packs.
The group stated that its At-Home performance was driven by a focus on optimising its pack-price mix and taking advantage of the shift to online shopping. Growth was led by its Pepsi MAX, 7UP free and Robinsons squash brands.
Having recently taken responsibility for the sale and distribution of the Rockstar energy drink that PepsiCo acquired last year, Britvic said it will be relaunching the brand in second half to accelerate its growth in the energy category which it estimates is worth £1.3bn. The company said: “This will include a new brand identity, better tasting liquids with added functional benefits, as well as a major marketing programme.”
Britvic also highlighted its recent purchase of Plenish, a plant-based milks, cold-pressed juices and shots company that it hopes will build its presence in the fast-growing segment.
Looking ahead, the group stated that trading had been “encouraging” in the first weeks of its second half period as lockdown measures began to ease in the UK. The group is planning investment to “ramp up in H2 to capitalise on near-term market opportunities and drive long-term growth”.
It also anticipates a positive mix impact as At-Home growth moderates, socialising increases and on-the-go consumption regains momentum.
Chief Executive Simon Litherland said: “In challenging circumstances, we have delivered a robust first-half performance, demonstrating the resilience and agility of our business.”
He added: “In the second half we plan to rebuild investment behind our brands to ensure we emerge strongly and are best positioned for the recovery as it evolves.”
NAM Implications:
- Serious but not unexpected falls in sales and profits.
- Potential to optimising increases in socialising and on-the-go consumption gains in momentum.
- Against a backdrop of rivals attempting the same.
- Watch this space…
