Britvic to cap Irish pension benefits as sales disappoint
DRINKS company Britvic is to cap the amount of salary employees can contribute to the company's defined benefit pension scheme and introduce a range of cost-cutting measures to its Irish operation in an effort to shore up a business that has continued to struggle so far this year.
Revenue from Ireland fell 11pc to £72.7m (€90.6m) as the company, which is best known in Ireland for the 'Club' range of soft drinks and Ballygowan water, said the Irish market remained "challenging" in the 28 weeks to April 15 and "shows no sign of recovery in the near term".
The soft drinks market fell 2pc during the year while the convenience market dropped 3.6pc.
Britvic said the shift from the pub to off licences continued, with the pub trade falling 5pc.
Those numbers prompted a wave of cost-cutting measures in the Irish business.
"We are implementing a multi-year programme of initiatives which will run into at least late 2013," the company said.
"We have reduced headcount materially, fully outsourced and consolidated our distribution contract and are implementing initiatives to reduce our labour cost. We have also undertaken a detailed review of our product range, especially in our factored goods, to remove cost and complexity.
"We believe the introduction of a cap on salary level eligible for the defined pension benefit and the removal of future indexation will make this benefit affordable for the business by reducing future liabilities whilst preserving this important benefit for our employees."
Overall, Britvic posted a 19pc gain in pre-tax profits to £24.1m on revenue of £641.1m.
That drove the share price up the most in seven months at one point before falling back to close up 1.38pc at 346p in London.
The company also confirmed David FitzGerald as managing director of Britvic Ireland. He has been interim MD since November.