Britvic sees no recovery in Irish trade

DRINKS group Britvic said trading conditions are extremely difficult in Ireland with no signs of recovery as sales plunge 16% in the fourth quarter.

The soft drinks market in Ireland is proving particularly difficult for the British drinks firm. Pepsi, however, has bucked the trend and has been the fastest growing carbonate this year, with sales up 14%.

The pub sector is proving “incredibly challenging” for the company, with volume sales down 20%. Britvic said the pub sector in Britain is performing significantly better than in Ireland.

Volumes were down 0.5% in the Irish grocery soft drinks market in the fourth quarter.

Britvic Ireland chief executive Andrew Richards said people are now more mindful of their spend in pubs and are spending less time there.

The company raised the target for its cost savings programme in May to €27 million by 2011.

On a group level Britvic said full-year revenue advanced as British and international sales offset the decline in Ireland.

Revenue in the year ended September 27 rose 5.6% to £978.8m (€1 billion). Britvic said it would meet recently raised full-year profit forecasts as consumers continued to buy branded drinks, including 7-Up and Pepsi. Fourth-quarter sales rose 4.2%, compared with a 5.9% third-quarter increase.

Wayne Brown, an analyst at Altium Capital said: “Some people thought the fourth quarter would strengthen on the third quarter, given it includes most of the summer months.”

The drinks manufacturer should achieve margin expansion in the next fiscal year as raw material costs decline, Brown said. Britvic said today cost increases will be little changed.

While Britvic is still seeking acquisitions in mainland Europe, “the opportunity does not always present itself immediately”, Mr Moody said.

In the British take-home market conditions improved in the last 12 weeks with volume growth of 1.7% and value growth of 2.8%.

Britvic also said there are early encouraging signs of stabilisation within the licensed on-premise market.

Meanwhile C&C fell as much as 3.3% in Dublin trading yesterday after Britvic reported the drop in Irish sales.