Ballygowan owner sees Irish revenue dip on wholesale weakness
Britvic group performance sees revenue and profit rise almost 5 per cent
Britvic said it remained confident that further progress would be made in the remainder of its financial year. Photograph: Cyril Byrne
MiWadi and Ballygowan owner Britvic’s sales declined in the Republic on the back of a fall in the sale of third-party alcohol brands to pubs through its wholesale division.
The British drinks company said that in the 28 weeks to April 14th it focused on “value ahead of volume”, growing Pepsi, MiWadi and Ballygowan.
The business, which also distributes brands including 7Up and Lipton Ice Tea in the Republic and the UK, said it initially saw declines in volumes of certain drinks following the introduction of the sugar-sweetened drinks tax (SSDT) and growth in low- and no-sugar variants. This trend has now stabilised, it added.
On the whole, the volume of drinks sold by the company dipped 4.5 per cent to 110.2 million litres after it increased promotional activity for Ballygowan. Actual revenue rose 4.6 per cent to £90.6 million although on a constant basis excluding the SSDT, sales dropped 0.9 per cent.
For the group, revenues rose almost 5 per cent to £769.2 million while profit after tax for the half year rose 4.8 per cent to £34.9 million.
“I am pleased to report that we have delivered another strong performance in the first half of the year,” said chief executive Simon Litherland.
“As we anticipated, the soft drinks levy has benefited our portfolio, accelerating the consumer trend towards our heartland of low and no sugar brands. Pepsi Max has generated more incremental retail value than any other cola variant, while the rejuvenation of the Robinsons brand continued to deliver both significant revenue and squash category value growth.”
Management has put in place contingency plans to deal with the possibility of a no-deal Brexit, the company said, including holding higher levels of inventory. As a result, it has incurred additional warehousing costs but believes it is “well placed” to deal with the uncertainties.
In its outlook, Britvic said that with its strong balance sheet and improving cash flow, it remained confident that further progress would be made in the remainder of its financial year and that market expectations will be achieved.
The board increased its interim dividend by 5.1 per cent to 8.3p per share.