Britvic revenues decline by almost 14% as recession takes fizz out of sales

DRINKS GROUP Britvic Ireland said yesterday that its revenues fell by 13.8 per cent in the first half of its financial year as the effects of the recession began to be felt.

Britvic’s Irish arm, which numbers Club and Ballygowan water among its brands, had zero earnings before interest, tax, deprecation and amortisation in the 28 weeks to the end of April 12th compared with a surplus of €5.8 million in same period of the previous year.

The British-listed drinks company said it remained “cautious about 2009 and 2010 as [Irish] consumers change their shopping and lifestyle habits and actively seek value at the point of purchase”.

“We see no evidence at present of any upturn in the Irish soft-drinks market,” it added.

Britvic said its grocery soft-drink volumes rose by 4 per cent in the period. But volumes in the “convenience and impulse” market and in the pub trade fell by 15 per cent and 20 per cent respectively.

“In the total take-home market, no soft-drinks category is in growth,” Britvic added.

In spite of the gloomy economic backdrop, the company said it retained its substantial market share and would achieve “improved” synergies of €27 million by 2011 from its Irish business as a result of a €10 million investment in information technology and cost savings in production, distribution and procurement.

In January, the company announced plans to cut 145 jobs from the Irish subsidiary.

Britvic acquired the Irish business through the purchase of CC’s water and soft-drinks division in 2007 for €249 million.

Britvic chief executive Paul Moody said he had no regrets about that deal. “We have no doubt that the business we bought was the business we got,” he said, adding that the group had accelerated its restructuring of the Irish arm in a move that would yield about twice the cost savings envisaged at the time of the deal.

“We are building a very smart, integrated business . . . In a year or so, or how ever long it takes to reorganise, we will be well placed to build on our market position.”

Andrew Richards, Britvic Ireland’s managing director, said the job cuts were being “worked through”. No pay cuts or freeze is proposed for the 800 who will remain with the Irish company.

At a group level, Britvic’s sales rose by 6.3 per cent to £483.2 million (€552.5 million) while its group operating profit was up 1.6 per cent at £31.9 million.

Its share price closed in London up 12.7 per cent at £3.03.