Britvic sales hit by coronavirus restrictions
Britvic has reported volatile sales across the board due to the pandemic, with its out-of-home channel adversely hit by lockdown restrictions.
The figures
In the six months to 31 March, revenue rose 1% to £698m with profit before tax up 16% to £53m.
Britvic said while it is confident of its liquidity the board will defer its dividend decision to later in the year when the full impact of the coronavirus is clearer.
The drink producer’s net debt position is £664.5m at the half year with undrawn facilities of £162m with £47.6m of cash holdings as at 31 March.
Why it’s interesting
The drinks retailer said it had a robust start to the year, but since mid-March the coronavirus restrictions have hit trading activity in the hospitality industry have impacted out-of-home.
The largest impact has been seen in Britain and Ireland, where exposure to the out-of-home channel is greater than in France or Brazil.
Britvic will cut discretionary spend, within which “the most significant lever is A&P”, while also stopping all non-essential and non-committed capex for the remainder fo the financial year.
Britvic’s modelling for the impact of coronavirus on its trading assumes that a level of restrictions on movement and social distancing will remain in place until March 2021. Within this, the firm’s conservative view assumes only a small proportion of out-of-home outlets will reopen in this time.
What Britvic said
Chief executive Simon Litherland said:
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.
As a business and as a team, we have repeatedly demonstrated our agility as well as our ability to successfully navigate tough headwinds. 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.”
Shares are up 4.3 per cent.