Britvic To Bubble Over Following Results?
Connor Campbell | Nov 24, 2017 11:30
Will Britvic (LON:BVIC) being doing the Tango following next Wednesday’s full year results?
The soft drinks producer – Britvic’s products include Robinsons, Tango, R. White’s Lemonade and J20 – has had quite the 2017. Starting at £5.74 the stock hasn’t really stopped climbing, only recently beginning to plateau in mid-September. Since then it’s been ranging between £7.25 and £7.75, with an all-time closing high of £7.81 occurring in early November. Britvic PLC now sits at a current trading price of £7.68, a near 34% increase on where it was in January.
Contributing to this rise was May’s interim results, with Britvic posting an 11.5% surge in half year revenue – that’s a 3.7% rise at constant exchange rates – to £756.3 million. That helped compensate for a 7% drop in pre-tax profit to £50.1 million, as the company dealt with restructuring costs.
It’s most recent update came towards the end of July. Third quarter revenue jumped 6.5% at a constant currency basis to £384.6 million, with the period also seeing a 2.3% increase in volume and a 2.9% rise in average realised price. In the UK revenue was up 4.9%, with a Pepsi Max and R Whites-led 7.6% increase in carbonates countering a 0.4% drop in the stills division, where both Robinsons and Fruit Shoot struggled with pricing due to ‘aggressive competition’ in the grocery sector.
In terms of Wednesday’s annual results, investors will want to make sure that the slide in interim pre-tax didn’t grow any wider in the second half of the year. A turnaround in the UK stills division in Q4 would be welcome, as would signs of improvement in the ‘challenging’ Brazil market. And given the rather bleak consumer confidence situation in the UK – fuelled by the decline in real wages – Britvic’s outlook for the upcoming could be important.
Britvic has a consensus rating of ‘Hold’ with an average target price of £7.52.
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