Encouraging signs from Britvic?

<p>Shares of soft drinks maker, Britvic, are up 7% (at time of writing) on the back of the company’s latest market update. For the twenty […]</p>

Shares of soft drinks maker, Britvic, are up 7% (at time of writing) on the back of the company’s latest market update.

For the twenty eight weeks ended 13th April, the UK-based company took revenue of £671m, up from the £639m reported in the same period last year.

Pre-tax profit came in at some £45m, representing around a 21% increase over the prior year.

The company’s top-line growth was thanks in part to having sold one billion litres of soft drinks in the period (up 3.9% over the prior year), together with a 0.8% increase in average realised price (ARP).

By region, Britvic performed particularly well in France, with revenue up 7% and sales volume increasing by 5.4%.

Ireland, on the other hand, continues to prove challenging with a 5.2% drop in revenue – a 5.3% fall in ARP partly due to promotional activity didn’t help.

Britvic’s renaissance

It was only a few years ago when Britvic – maker of the Tango, J2O and Robinsons drinks, among others – felt the heat of challenging trading conditions.

A product recall back in 2012 certainly didn’t help the company – a recall of Fruit Shoot to be precise, due to faulty caps. Plunging shares, sales and margins were followed by a merger attempt with Irn Bru maker, AG Barr.

The company has since seen something of a turnaround over the last year or so, and is chasing further growth with its international expansion ambitions…

It’s already kicked it off: now boasting nationwide availability of its Fruit Shoot drinks in the US.

That’s thanks to the expansion of PepsiCo Americas’ distribution coverage (previously 41 states) as well as new agreements with independent bottlers.

Meanwhile, Britvic also has an eye on India, with plans to launch Fruit Shoot in the country later this year.

Of course, the company’s rising shares reflect its progress, having soared a notable 43% over the last year alone. That said, Britvic’s valuation of some 15x forward PE is still below that of some of its peers – AG Barr’s 21x, for instance.

Indeed, recent news flow surrounding Britivic point to sustained progress towards a turnaround.

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