C&C deal 'difficult to do now' - Britvic

One More Thing:The boss of C&C, Maurice Pratt, has had a tough year but he can take some solace from having parted UK-based Britvic plc from €249 million in May for its water and soft drinks business.

In the intervening months, fizzy drinks sales have been battered by one of the wettest summers in memory, stock market valuations have collapsed and we have had the global credit squeeze.

That is to say nothing of the decline in C&C's own valuation. It is hard to imagine Pratt netting the same amount if he were selling the business today.

Britvic published its results yesterday and chief executive Paul Moody said the price paid was a "fair reflection of the value" of C&C's soft drinks business at that time. He acknowledged, however, that the deal would be "difficult to do now", for the aforementioned reasons.

Britvic said it was on target to achieve €14 million in annual synergies over a three-year period but declined to say if this would lead to a reduction in its 1,000 workforce or a rationalisation of its six facilities on the island.

Britvic now has a 33 per cent share of the water and soft drinks market here. Its brands include Pepsi, 7-Up, Ballygowan, Club, Cidona, Robinsons and J2O.

With the deal only getting regulatory clearance in late August, the newly-acquired Irish business only made a five-week contribution to Britvic's full-year results to the end of September.

This amounted to revenues of £13.8 million and an operating profit of £800,000.

In the year to the end of February 2007, C&C's soft drinks division had turnover of €270 million and earnings before interest, taxation, depreciation and amortisation of 24.7 million.

The accounts also show that the pension fund of the employees of C&C's soft drink business showed a deficit of £5.4 million at the end of September.

While Britvic now has an enviable position in the Irish soft drinks market, sales of fizzy drinks are growing at only 1-1.5 per cent a year, a trend the company expects to continue.

Water seems to be the star performer, with Britvic predicting that the market here expected to grow by up to 12 per cent, driven by a move by consumers to healthier lifestyles.

"It's up to us to capture that," said Billy O'Regan, Britvic Ireland's managing director.