Investors To Be Sweet For Britvic Following Results?
Spreadex | May 21, 2018 10:39
A fantastic 2017, when the Robinsons and Tango-owner surged 42% across the year, left Britvic (LON:BVIC) in a very good position heading into 2018. And the company initially seemed to capitalise on this solid footing, hitting an all-time high of £8.24 in mid-January.
Yet investors quickly soured on the stock. A poorly received Q1 statement at the end of January was responsible for the brunt of its losses, a decline that eventually left it bouncing off 11 month lows of £6.60 in late March. Since then it has begun to recover, rising to a 3 and a half month high of £7.60 in mid-May, before pulling back to a current trading price of £7.52.
On the surface the aforementioned first quarter update was good, with total group revenue rising 3.3% at a constant currency basis to £337.2 million. The 16.5% and 22.6% growth seen in Ireland and Brazil respectively, the latter lifted by the acquisition of Bela Ischia, alongside a solid 4.9% increase from GB Carbonates helped counter the 6.6% slide in GB Stills, the 5% decline in France and the 8.1% drop in the International division.
These numbers were overshadowed, however, by the fact that the closure of the company’s factory in Norwich in favour of a new production set-up in Rugby will cost as much as £40 million. That and the continued uncertainty about the then-impending sugar tax in the UK and Ireland.
Though it only came into force in April, the sugar-tax will likely be the focus of Thursday’s interim report, with investors keen for some kind of statement on its early impact. As for its figures, analysts are expecting a 3.5% jump in revenue, but with earnings per share roughly flat year-on-year.
Britvic PLC has a consensus rating of ‘Hold’ alongside an average target price of £8.41.
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