Britvic benefits from fizzy drinks revival

A resurgent fizzy drinks market helped soft drinks giant Britvic post a healthy gain in pre-tax profits today.

The group, which makes Tango and Robinsons, said its surplus for the six months to April 15 came in at £10.3m (€15m), compared to a loss of £5.3m (€7.7m) in the same period last year.

A rebound in the fizzy drinks market helped the company “out-perform” the soft drinks sector as carbonates volumes grew by 8.1% in the period.

Britvic, which also distributes Pepsi and 7Up in the UK under licence, said it had benefited as the trend towards healthy living and well-being “settled down” and consumers returned to the no-added-sugar varieties of fizzy drinks as a “healthy” alternative to “better for you” still drinks.

Revenues grew 9.3% to £353.6m (€516m), although still drinks reported a slower rise with volumes up 1.7%.

The group said it had seen a “pendulum effect” as consumers switched into still drinks last year, but have now moved to a more balanced position across the still and fizzy markets.

Britvic said fruit juices had also been hit by a rise in raw materials costs, which had, in turn, been passed on to the customer.

Strong promotional activity saw Pepsi continue to make market share gains, with a 23.5% share of the cola market during the period, while Robinsons maintained its number one position in the squash sector.

England-based Britvic is planning to re-launch the brand during the summer without artificial colours and flavours, backed by a £12.5m (€18.3m) marketing campaign – “Raise them on Robinsons”.

Children’s water brand Fruit Shoot H2O and juice drink J2O both performed well in the period, with J2O benefiting from a national television advertising campaign and a strong performance over Christmas.

The group said its international business achieved an improved performance following the successful launch of Robinsons in Sweden and Denmark, which led to the roll-out of the squash brand in Finland earlier this month and will see Britvic scale up its presence in the Nordic region.

Chief executive Paul Moody said the encouraging trends seen in the first half had continued through to the second half of the year, adding he was confident of a positive outcome for the full-year, despite the tough comparatives following last year’s hot summer and the World Cup.

He highlighted the recent acquisition by Britvic of the soft drinks business of Magners producer C&C as a “great opportunity” to accelerate earnings growth. The proposed deal saw Britvic spend £170m (€248m) on some of Ireland’s leading brands, including Ballygowan bottled water.