Bad weather reduces thirst for Britvic products

SOFT DRINKS group Britvic said poor weather in June and weakening consumer spending caused a contraction in the Irish soft drinks market in the third quarter, weighing on its results.

The market performed in line with expectations until the final four weeks of the quarter, when weather conditions were the coolest since June 2001.

Both the British and Irish soft drinks markets contracted sharply in volume and value in June. In Britain, volume was down 8.2 per cent compared with the previous year. The market fell more sharply in Ireland, declining 13.2 per cent.

Group revenue for the quarter was up 12.2 per cent, as the French unit boosted results.

Excluding Britvic France, revenue was 1.8 per cent lower for the quarter, weighed down by a 15.3 per cent fall in Irish revenue.

In the British unit, revenue grew 0.7 per cent, although underlying volumes declined 2.5 per cent. The carbonates sector was 4.4 per cent higher in terms of revenue, but still drinks fell by 4.2 per cent as Robinsons switched from single to double concentrate.

In France, third-quarter revenue was 9 per cent higher, supported by a strong performance in Britvic’s syrup brands and the launch of Teisseire Fruit Shoot.

Revenue in the international sector grew 5.3 per cent.

“During the third quarter, the soft drinks markets in GB [Britain] and Ireland were adversely affected by the poor weather in June, whilst the comparative period in 2010 was strong reflecting both good weather and the football World Cup,” said Britvic chief executive Paul Moody.

“Nevertheless, Britvic delivered revenue growth across the GB, international and France business units, although Ireland showed a decline. The actions we have taken to proactively manage arp [average retail price] and margins against such challenging market conditions underpin the board’s current confidence in meeting its expectations for the full year.”

However, Mr Moody added that the company continued “to be cautious about the challenging trading conditions and the impact of consumer sentiment in our largest markets as we move into the final quarter of the financial year”.