Britvic shares down as product recall affects profits
SHARES in Britvic fell yesterday after struggles in the Irish market and the fallout from a product recall hit trading.
For the year to the end of September, Britvic said profits after tax fell by nearly one-fifth to £62.9m (€77.9m), even as revenue dipped by only 2.6pc to £1.26bn.
Those figures translated into adjusted earnings per share of 27.2 pence. In Ireland, Britvic said the "difficult economic conditions" continued to be a challenge in 2012.
"The pubs and clubs sector continued to contract and we were significantly impacted by the performance of the third-party brands that we distribute through the licensed wholesale business," Britvic added.
Trading conditions here "remained difficult", Britvic said. The company cut a number of jobs earlier in the year. Revenue from Ireland dropped 14.8pc to £138.7m, although volumes only lost 2.7pc.
Britvic, which counts Ballygowan and MiWadi squashes among its brands, said the soft drinks market declined more than 2pc last year, about half as bad as the pub trade.
Overall, Britvic's bottom line was hit by a recall during the summer of its Fruit Shoots line of drinks, which were taken off the shelves over a faulty cap.
The recall cost £16.9m in the year, and will cost up to £8m this financial year, it said, adding that production levels would return to levels in line with historical demand by January.
Company chief executive Paul Moody said the recall was regrettable but necessary. "The business responded quickly and efficiently to manage the situation and refocused our priorities as required over the balance of the year," he said.
"This has been a difficult year for the group and the progress that we made was more than offset by the impact of the Fruit Shoot product recall.
"Additionally, the negative macro-economic trends, leading to weak consumer confidence, and the cold, wet summer endured across most of our markets weighed heavily on the soft drinks market and Britvic within it," he added.
Earlier this month, Britvic agreed a merger with the Scottish firm AG Barr, creating a company with annual sales of £1.5bn.
Shares in the company closed at 396 pence, down 1pc.