Britvic Ireland's quarterly revenues fall 2.9%

Britvic's Irish division, which owns the Ballygowan and Club Orange brands, said the market here deteriorated sharply at the end of 2008.

In a trading statement for the 12-week period to December 28th, the company said the challenging overall market conditions could be seen by a 5 per cent fall in take home sales compared with the same period in 2007 while pub sales were 15 per cent lower.

The company announced 145 job losses in Ireland earlier this month.

Revenues from Britvic Ireland were £49.9 million (€53.8 million) in the 12 weeks to December 31st, down 2.9 per cent on the comparable period in 2007, although currency fluctuations meant underlying euro revenues were 17 per cent lower.

The company said the soft drinks market in Ireland was suffering from "extremely poor and unique macro-economic conditions" and that while the business was holding market share a decline in sales volumes and prices "reflect a consumer focused on value".

Britvic said the job losses in Ireland would deliver savings of €1 to €1.5 million in the current year, rising to €7 million in 2010. A restructuring in its UK operations would result in savings of £1 to $1.5 million in the GB and International division in the current year, doubling in 2010.

Looking forward the company said it is anticipating "exceptionally challenging trading conditions" in Ireland this year.

On a group-wide basis Britvic said revenues were £218.6 million ($308.4 million) for the 12 weeks to December 21st, its first quarter, up 2.1 per cent when compared with the first quarter of 2007 and said it was confident of meeting expectations for the full year.

"We have seen very strong Great Britain and International trading in the first four weeks of the second quarter," said the company.

Britvic said this, combined with action to address costs and more favourable commodity prices, made it confident it would meet full-year expectations.

Britvic, which is Britain's second-biggest soft drinks maker behind Coca-Cola Enterprises, said it outperformed the UK soft drinks market in its key categories, making volume and value share gains.

Revenue in the British and International division grew 3.8 per cent during the period.

This was made up of still drinks growth of 1.4 per cent, driven by market share gains from Robinsons and the continued success of last year's launches of Gatorade and Drench, carbonates drinks growth of 5.2 per cent and Britvic International growth of 18.2 per cent.

The group anticipates the UK soft drinks market will remain "relatively resilient" in 2009 but the Ireland market would be "particularly challenging".

Jonathan Fell, analyst at Deutsche Bank, reiterated his buy recommendation and year to end-Sept. 2009 pretax profit forecast of £74 million, up from £70 million last time.

"The company is growing UK revenues in difficult circumstances through significant volume and market share gains, and is now putting together a good record of outperformance against the wider UK drinks market," he said in a research note.

Britvic forecast a further 1 percentage point reduction in raw material inflation to 4 to 4.5 per cent in 2009.

Additional reporting Reuters