Britvic cautious about prospects for the on-trade

Britvic, which produces brands including Pepsi, Fruit Shoot and J20, said it remained cautious about a likely recovery in the pub sector, despite evidence that the decline of soft drink sales in the on-trade was slowing down.

Reporting overall turnover for the year to September 27, 2009, up nearly six per cent at £9,778.8m, Britvic's chief executive Paul Moody said recent conditions in the UK soft drink market "have shown some signs of improvement".

Britvic claims the number one spot in the on-trade, with more than 40 per cent market share by volume.

But like many suppliers Moody was cautious about the longer term. "Visibility in both the UK and Ireland beyond the short term remains limited and we take a cautious view of consumer spending," he said.

Britvic said operating profits rose 14 per cent to £110.1m, with pre-tax numbers up 23.4 per cent to £86.5m. Earnings per share rose more than a fifth to 29.9p, while a full year dividend of 15p - up 19 per cent - would be paid.

Moody said the UK on-trade soft-drinks market saw a volume decline of 1.9 per cent for the year to September 2009, "though the most recent quarter encouragingly saw a 0.6 per cent volume increase.

"However, given the pressures within the overall Licensed On-Premise market, we remain cautious on the prospects for a fuller and sustained recovery in the channel.

Across the Irish Sea things appeared to be even worse. In what Moody described as a an "extremely challenging macro-economic environment", the group said the Irish soft drinks market "shows no indication of a return to growth in the short term"