Job cuts floated as Britvic's Irish arm restructured
Published 22/10/2010 | 05:00
STAFF at Britvic's Irish operations are facing the prospect of more job cuts after the company said it will 'restructure' its Irish operations.
The drinks maker, which counts Ballygowan, Club soft drinks and Pepsi among its brands here, said it would review its Irish business on the back of a "harsh macro and consumer environment in Ireland", which saw full-year revenue at Britvic Ireland fall sharply.
Grocery market sales in the Republic fell by 5.6pc for the fourth quarter, while on-trade slumped by 11.7pc. Business at convenience stores tumbled 8.9pc.
Chief executive Paul Moody said that the Irish operation would be restructured to bring it in line with the company's performance and to gear it up for the recovery when it comes.
"We have increased revenue across our businesses, but in Ireland trading has been especially difficult where economic conditions have hit Britvic hard. As a result we are likely to take a goodwill impairment in our full-year results and a restructuring of our Irish operations has commenced," he said.
Last year the company attributed goodwill of £77.6m (€87.4m) to its Irish arm.
Britvic Ireland's managing director, Andrew Richards, said any restructuring was designed to create a "realistic" commercial structure in its business here. He did not comment on whether redundancies would be part of the reorganisation.
"Things are at a very early stage and discussions with staff have only just begun," he said.
It is believed, however, that job losses are likely by the time the review is completed.
Britvic employs around 800 people in Dublin, Tipperary, Limerick and Belfast. Last year the company laid off 160 people and closed some plants in an effort to shore up the business.
Since it bought the Irish brands from C&C for €249m in 2007, Britvic has seen the bottom fall out of the Irish market.
Despite that, the company are believed to be focused on realigning the business to the retail and supermarket sector and being less reliant on the on-trade and convenience stores. The company believes that such a realignment will make the business stronger in the teeth of the downturn.
Barry Gallagher, an analyst with Davy Stockbrokers, said the cost base in Ireland "is likely to be reduced significantly" as the company was repositioned.
Despite the struggles of the Irish operation, Mr Moody denied having any regrets about moving into Ireland.
"When we bought these brands nobody had any idea that the world economy would fall the way it has done. We're here now and we are very focused on turning the business around," he said.
Overall Britvic said that revenue for the year was up nearly 15pc, driven by strong performances in its international and GB Carbonates businesses.
"The combination of revenue growth and a tight management of costs mean that we expect to meet market expectations for the group in 2010. Additionally, despite our caution on a weak consumer environment, we are confident at this early stage that we have the focused strategy to deliver another robust set of results for the year ahead," said Mr Moody.
Shares in Britvic were up nearly 6pc by late afternoon in London, trading at 498.2p.