Britvic Irish sales hit by pub closures and lost water cooler moments
Soft drinks company Britvic Ireland saw revenues tumble 12.5%, to £79.3m (€89m), in the six months to the end of March, due mainly to the closure of pubs and offices amid the Covid-19 restrictions.
In Ireland, Britvic owns the Ballygowan, Club, and MiWadi brands and distributes international products like Pepsi, 7-Up, and Mountain Dew.
Its water cooler business, which supplies Ballygowan to companies, was heavily impacted by the migration to home working and the closure of pubs hit its Counterpoint licensed wholesale division.
Britvic said the Counterpoint business has been “significantly impacted”, with an £8.5m non-cash impairment charge being recognised to write-off the intangible assets, goodwill and PPE relating to the business.
However, the British soft drinks group said its Irish division saw sales volume and revenue growth in its branded goods in grocery and convenience stores, with a particularly strong performance for MiWadi and Pepsi, over the likes of Club and Fruit Shoot.
On an overall group basis, Britvic said revenues were down by over 9%, year-on-year, in the first half of its financial year at just under £699m; although post-tax profits were 11.5% ahead at £39m. It said it saw value share gains in Britain, Ireland, and Brazil.
However, it saw heavy revenue falls across its international distribution business and in central operations in Britain and France.
Group chief executive Simon Litherland said Britvic remains well-placed to weather the current pandemic crisis. However, it has delayed deciding whether or not to declare a shareholder dividend until later this year.
“The world is a very different place from the one it was a few months ago...We entered the Covid-19 crisis with strong momentum, having delivered a robust first-half performance, which continues our track record of consistent delivery since 2013,” he said.
“While these times are clearly unparalleled, soft drinks has proven itself to be a resilient category time and time again. As consumers increasingly turn to trusted brands, we are confident that our long-term strategy will continue to create value for all our stakeholders,” he said.
Goodbody hailed Britvic’s latest results as a positive performance.
“Overall, this is a positive update from the company with a strong first-half performance, robust balance sheet and liquidity position and proactive management of the Covid-19 challenges,” said analyst Patrick Higgins.
