Britvic sees cost hit from weak pound after Brexit vote

21st Jul 2016 08:12

(ShareCast News) - Soft drink maker Britvic has reported third quarter revenue of £346.3m, up 5.3% on last year despite a wet summer, but warned the decision by the UK to leave the European Union had created a double whammy of consumer uncertainty and input cost pressure.Chief executive Simon Litherland said organic volume increased 1.4% while revenue declined 0.7% to £326.5m and the company remained on track to deliver full year earnings before interest, tax and amortisation within the guidance set at the beginning of the year of £180m - £190m."Looking ahead, the decision by the UK to leave the EU creates additional consumer and economic uncertainty whilst the weakening of sterling will place pressure on our input costs in GB," he said."However, our strategy to leverage our market leading brands in our core markets, expand internationally, continue to invest in innovation and focus on cost control, means that we are well placed to continue to deliver our long-term strategic priorities and create value for our shareholders."Britvic said Great Britain carbonates revenue increased 2.9% with a 4.7% volume increase partly offset by average revenue per litre declining 1.7%."Pepsi Max continued to outperform the market, gaining significant share in the quarter. GB stills revenue declined 10.2%, primarily due to an 8.2% volume decline. Robinsons performance improved on the first half of the year, despite still cycling the withdrawal of the added sugar range.""Ireland revenue increased 10.6% with both Counterpoint and Britvic Ireland in strong growth. Both the carbonates and stills portfolio revenue increased during the quarter. Ireland has now delivered revenue growth in five of the last six quarters.""In France, revenue declined by 2.0% as volume declined 1.7% and ARP declined 0.4%. This was principally due to a decline in the syrups range which was impacted by the poor weather in June."Britvic said international revenue was flat on last year with the benefit of double-digit revenue growth in the USA offset by weaker sales in the travel and export markets, where trading conditions remained challenging. It added that it had decided to withdraw from India, terminating its distribution agreement."Although Fruit Shoot has been received positively by Indian consumers we have decided to focus our resources on other markets that offer potentially higher returns in a shorter timeframe," Britvic said."Our Brazilian business has continued to gain market share and generated revenue of £19.8m, up 37% on last year on a comparable basis, despite a very challenging macroeconomic environment. The strong performance came from volume growth of nearly 20%, and price increases to recover raw material inflation," the company added.