Britvic: profit up, plans to buy rival

Britvic, the UK-based soft drinks producer, today reported a 39% increase in profit before tax of £27.8m as it revealed plans to purchase its European rival Fruité Entreprises for Eu237m (£202m), funded in part by a £21m share placing.

Unveiling its interim results for the 28 weeks to 11 April 2010 it said it had seen a 4.6% increase in revenue to £505.3m — which was driven by an 11% in its carbonates sold in the UK and a 5.5% in its home-based stills market.

The company, behind the brands Tango and J2O, gave no indication of a performance breakdown between on-trade or off.

Paul Moody, Britvic's chief executive, said the group was on track to meet its full year expectations.

Britvic also paid an interim dividend of 4.7p per share, a 14.6% increase which is said reflected, "the board's continuing confidence in the future prospects of the business and the underlying cash-generative nature of its activities."

Moody said: "Britvic has put in another strong performance during the period, delivering double-digit growth in both operating profit and earnings.

"Whilst the severe winter weather and tough comparable period in the prior period contributed to a slowing in GB/International revenue growth in the second quarter; our brands have continued to take market share across key categories."

Britvic said its proposed acquisition of Fruité Entreprises gave it entry to the French soft drinks market — that had a value of Eu12.5bn in 2009.

Moody added: "With a portfolio of iconic, market-leading still brands and as France's leading independent soft drinks company, Fruité is an excellent strategic fit for Britvic. The contemplated acquisition would extend our soft drinks focus into continental Europe, would drive our already strong portfolio into new markets and would enhance our GB offering."