18 August 2008 - As part of its ongoing reporting calendar, Britvic on the 25th July, reported a strong revenue performance of £690.0m for the 40 weeks to 6th July 2008 (“the period”), an increase of 29.9% on the prior year. This includes a first time contribution from Britvic Ireland of £147.2m for the 9 months to 30th June 2008.
GB and International revenues grew by 3.7% during the period, representing GB stills growth of 4.3%, GB carbonates growth of 2.5% with Britvic International growth of 22.3%. During the 3rd quarter of the period, underlying GB and International revenues grew by 7.4%.
In GB stills, Britvic materially outperformed the market during the period with volume growth of 7.8% against a Take-Home stills market decline of 1.2%. This outperformance reflects volume and value share growth in a number of key categories, including squash, juice drinks, water and sports drinks driven by strong in-store execution, increasing promotional effectiveness and the full roll out of Drench and Gatorade. GB carbonates also outperformed the market with volume growth of 2.6% against a Take-Home carbonates market growth of 2.2%, a result driven by a particularly strong Pepsi performance.
Whilst lapping the poor summer trading conditions of last year, the soft drinks market continues to show very low growth in Take Home and a further deterioration in Licensed On-Premise. Our strong presence within many of the leading pub operators provides Britvic with a good platform to maintain out-performance of the market. However, we anticipate that conditions in the Licensed On-Premise market will remain challenging.
Britvic Ireland’s revenue grew 6.1% in sterling terms for the 9-month period, benefiting from exchange rate movements. Underlying euro revenues were down by 5.2%,with volume declining by 2.9%. Economic conditions in Ireland have become markedly more challenging in the last three months, driving a low to mid single digit decline in both the Take Home and Licensed On-Premise markets. Britvic Ireland continues to maintain share in all of its key categories and achievement of the synergies within Ireland outlined at the time of the acquisition remain fully on-track.
Raw material cost inflation remains a significant challenge for the sector with particular cost pressures in oil, PET and energy-driven inputs. Britvic now expects that raw material costs for the full year will rise by approximately 4.5%, marginally ahead of previous guidance. Additionally, looking forward into next year, Britvic anticipates further raw material and energy cost increases and is working to at least partially mitigate these increases through continued management focus on overall cost management and extensive Product Value Optimisation initiatives; designed to mitigate product costs. Helping to off-set the higher input costs in this financial year, Britvic now anticipates that the interest charge for this year will be at the bottom end of current market estimates.
Paul Moody, Chief Executive commented: “This is another period of encouraging top-line growth and a sustained EBIT margin, in which our strong and resilient brand portfolio has performed very well in spite of continued challenging trading conditions. Looking forwards, although we anticipate rising input and energy cost pressures, our strong focus on cost control allows us to remain confident about the delivery of earnings in line with market expectations for the current year.”