British drinks group Britvic today reported a sharp downturn in its Irish sales, saying trading conditions had become very difficult.
The company, which owns Ballygowan and Club Orange, said Irish sales in rose 6.2 per cent for the year as the euro climbed against the British pound but they fell 6.4 per cent in euros.
Overall Britvic reported today total sales up 29 per cent at £926.5 million, boosted by newly acquired operations in Ireland. Excluding contribution from that deal, sales rose 4.8 per cent to £725.8 million.
The market consensus for total revenue was £924 million, according to a survey of eight analysts by Reuters Estimates. UBS and Citi had forecast underlying growth of 4.6 to 4.7 per cent.
At its British business, Britvic said it outperformed the market in both stills and carbonates, reporting growth of 8.1 per cent and 4.3 per cent respectively.
Analysts at Citi said Britvic had demonstrated resilience against disappointing weather and a challenging consumer environment.
Deutsche Bank also described sales growth as impressive.
"The last two years has seen the company generate attractive levels of sales growth, which is all the more impressive when one considers how bad the last two summers have been in the UK," they wrote in a research note.
Shares in Britvic, which has underperformed the FTSE All Share Beverages Index by 33 per cent since the start of the year, were up 6.3 per cent at 182.75 pence earlier off an earlier high of 188 pence. The wider FTSE 250 was down 4.3 per cent.
The company, Britain's second-biggest soft drinks manufacturer, said sales at its Ireland business, which comprises the soft drinks business acquired from C&C Group Plc last year, totalled £200.7 million.
Britvic cautioned, however, the economic downturn in Ireland had resulted in "very difficult trading conditions", but that volume decline had been restricted to 3.4 per cent.
While declining to provide specific comment on the earnings outlook for 2009, Chief executive Paul Moody told reporters he did not expect any improvement in consumer spending next year, but that Britvic was better placed than other beverage stocks to weather the challenging economic conditions.
He repeated raw materials costs are set to rise by 6 to 6.5 per cent next year and that the company planned to "aggressively mitigate" them by using cheaper bottles, for example, as well as passing costs onto customers.
Regarding financing, Mr Moody said Britvic was in a good position, with "some headroom" for potential business opportunities, although the focus remained on integrating recent acquisitions.
"We have delivered a strong performance despite the disappointing weather, rising raw material and energy costs and the challenging market conditions," Mr Moody said in a statement.