Britvic PLC (LON:BVIC) said performance in the first half of the current financial year will “undoubtedly” be affected by COVID-19 restrictions, although it confides in the resilience of the soft drinks category.
In the year to September 30, 2020, revenue shed 9% to £1.4bn while adjusted underlying earnings (EBIT) tumbled 23% to £165mln.
The FTSE 250 group cut its final dividend by 28% to 21.6p per share in line with its 50% pay-out policy.
In the UK, volume and revenue declined, reflecting the significant impact of restrictions placed upon the Out-of-Home channels and On-the-Go consumption, while At-Home channel revenue increased, as consumers stayed home and bought family favourite brands such as Robinsons, Pepsi, Tango and 7UP, resulting in market volume and value share gains.
However, margin was hit by the shift to larger At-Home pack formats but was partly offset by significant savings in advertising spend, the company said in its final results.
In Brazil, revenue jumped 12% due to strong sales of ready-to-drink juices, Puro Coco and Fruit Shoot, which benefited from new pack formats, though the rest of the world saw a performance similar to the UK, Britvic said.
According to Susannah Streeter, analyst at Hargreaves Lansdown, the firm will benefit from the stability of its relationship with PepsiCo, for which it bottles and sells popular brands such as Pepsi and Mountain Dew, as well as the promise to make all its plastic bottles 100% recyclable by 2022.
“This pledge should add a bit of fizz to its sustainability credentials and may well help sales, with so many more shoppers now concerned about the impact of throwaway plastic,” she commented.
“However, the second wave of lockdowns, with bars and restaurants closed is likely to continue to depress revenues this winter so keeping the momentum up of increased ‘at home’ sales will be crucial.”
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