Product recall hits Britvic profits
Soft drinks maker Britvic posted a 19 per cent fall in annual profit, blaming a costly recall of its Fruit Shoot children's drink and a cold, wet summer across most of its markets.
Britvic, which produces lines such as Tango and Robinsons in the UK and Ballygowan and Mi Wadi in Ireland, said underlying pre-tax profit was £84.4 million in the year to September 30th, down from £105.1 million a year earlier.
Britvic earlier this month agreed terms on a £1.4 billion merger with smaller rival and Irn-Bru producer A.G. Barr.
Britvic, which also makes and sells Pepsi brands in Britain and Ireland, said a strong GB carbonates performance and market share gains had been undone by a recall of its Fruit Shoot drink over faulty caps. The recall will cost it £16.9 million this year, and up to £8 million in 2013, it said.
The Fruit Shoot hit pushed total group revenue down 0.8 per cent to £1.26 billion at constant exchange rates, impacting its GB stills, international and France businesses, while its Ireland operation continued to slump under tough economic conditions.
Group adjusted net debt was £446.7 million.
Britvic's all-share deal with Barr, which is subject to both shareholder and regulatory approval, will create one of Europe's biggest soft drinks companies, named Barr Britvic Soft Drinks.
The enlarged group, to be run by highly-rated Barr chief executive Roger White, will result in a 63 per cent stake for Britvic shareholders with AG Barr investors holding the rest.
Shares in Britvic closed at 477p yesterday, up 30 per cent on six months ago, valuing the business at £557 million.