Q3 Revenues Up 5.3% At Britvic But Warns Of Impact From Brexit Vote

Britvic has reported that its total third quarter revenue grew 5.3% to £346.3m (-0.7% on an organic basis – ex-Brazil). However, it warned that the result of the EU referendum is likely to impact its business due to consumer uncertainty and pressure on input costs.

In a weak and competitive soft drinks market, the group’s revenue in its Great Britain unit declined 2%, although volumes increased 1.4%. ARP fell 3.4%, due to continued deflation and negative brand and channel mix.

GB carbonates revenue increased 2.9% with a 4.7% volume increase partly offset by ARP declining 1.7%. The group said that Pepsi Max continued to outperform the market, gaining significant share in the quarter. Meanwhile, GB stills revenue declined 10.2%, primarily due to an 8.2% volume decline. Robinsons performance was said to have improved on the first half of the year, despite still cycling the withdrawal of the added sugar range.

In Ireland, revenue increased 10.6% with both Counterpoint and Britvic Ireland seeing growth. Both its carbonates and stills portfolio revenue increased during the quarter.

In France, revenue declined by 2% as volume fell 1.7% and ARP dropped 0.4%. Britvic said that this was principally due to a decline in the syrups range which was impacted by the poor weather in June.

International revenue was flat on last year with the benefit of double-digit revenue growth in the USA offset by weaker sales in the travel and export markets, where trading conditions were described as “challenging”.

Britvic’s new Brazilian business gained further market share and generated revenue of £19.8m, up 37% on last year on a comparable basis.

Simon Litherland, Chief Executive, commented: “Our Q3 performance was stronger than the first half of the year despite tough trading conditions and the wet weather in June. We have strong programmes in place for our brands over the balance of the year and remain on track to deliver full year EBITA within the guidance range we set at the beginning of the year of £180m to £190m.”

Looking ahead, he said: “The decision by the UK to leave the EU creates additional consumer and economic uncertainty whilst the weakening of sterling will place pressure on our input costs in GB. However, our strategy to leverage our market leading brands in our core markets, expand internationally, continue to invest in innovation and focus on cost control, means that we are well placed to continue to deliver our long-term strategic priorities and create value for our shareholders.”