Britvic revenue rises as warm weather lifts sales
Soft drinks levy and shortage of key component carbon dioxide strike in third quarter
When the soft drinks industry levy was excluded, revenue fell by 0.6 per cent over the third quarter. Photograph: Chris Radburn/PA
Revenue at drinks maker Britvic rose 3.4 per cent in the three months to July 8th, despite being hampered by an industry-wide shortage of carbon dioxide during the period.
The company said the figures showed a strong underlying performance for its third quarter, with revenue rising to £366.9 million (€411.2 million). This was despite a 4.5 per cent increase in the same period a year earlier.
When the soft drinks industry levy was excluded, revenue fell by 0.6 per cent over the third quarter. Reported revenue in the year to date rose 4.2 per cent, or 2.8 per cent excluding the levy, to £1.1 billion.
Revenue during the period was affected by a disruption to the supply of carbon dioxide into the UK and Ireland, which forced the company to scale back promotional activity on carbonated drinks, pushing its still range instead.
Revenue in Ireland revenue rose 11.3 per cent overall, or 6.6 per cent when the levy was discounted, despite both a strong comparative period last year. The warm weather also lifted sales of Ballygowan and other still drinks.
Revenue in its UK division rose 8 per cent, with much of the increase accounted for by the soft drinks levy. Excluding that saw the increase fall back to 1.9 per cent. Pepsi continued to gain share, with Pepsi Max leading the way. Revenue growth in its stills drinks division was strong, increasing almost 12 per cent – or 11.7 per cent without the soft drinks levy – with growth for both Robinsons and J20 products.
The company said it was difficult to see the true impact the soft drinks levy introduced in April has had on the industry, as the category has also benefited from the warm weather and been affected by the carbon dioxide shortage.
“We anticipate having a more informed view of the impact at the end of the year,” said Britvic. “ Early indications remain positive for the category and Britvic, with the shift from full sugar to low or no sugar products accelerating.”
However revenue in France fell 15 per cent, affected by poor weather and a strong comparative year. Britvic said the four weeks to June 24th was marked by a total market volume decline of more than 14 per cent, thanks to the weather.
International revenue was up 8.7 per cent, with Fruit Shoot making progress in the US, and Brazil saw its revenue rise 10.2 per cent.
“Britvic has delivered a strong underlying performance in the third quarter, through continuing outstanding execution of no sugar carbonates and substantial growth from our stills brands,” said chief executive Simon Litherland.