Britvic's Interim Profit After Tax Up 52%

LONDON -- Britvic (LSE: BVIC  ) , the soft-drinks producer with its own brands including Robinsons and Tango in addition to third-party PepsiCo brands Pepsi and 7UP, revealed in its half-year results that group revenue was up 0.4% to £639 million, group EBITA rose 27.6% to £54 million, and profit after tax jumped 52% to £29 million at constant exchange rates. 

The EBITA margin -- earnings as a percentage of revenue -- rose from 6.5% to 8.4%, leading to higher profit despite the relatively modest increase in revenue.

The Robinsons brand is growing market share for Great Britan still, while carbonates in general saw price growth. Fruit Shoot is recovering from the recall setback, and sales appear to have regained the levels seen previously. Britvic International is set to build on good progress and roll out to 30 U.S. states, doubling distribution to more than 41,000 outlets.

Adjusted earnings per share rose an impressive 47.6% to 12.4 pence, and the interim dividend increased by 1.9% to 5.4 pence per share. Group adjusted net debt decreased by 5.7% from £534 million to £504 million.

Chief executive Simon Litherland commented:

Britvic has delivered strong first-half profit growth, a material improvement in cash flow and a reduction in net debt. This has been achieved by growing our average realized price, a continued focus on cost and the substantial progress we have made in improving the underlying strength of our business.

We intend to change our operating model to generate stronger performance in our core markets and accelerate the increasingly attractive international opportunities, underpinned by a reduction in the cost base of £30 million per annum by 2016... we are confident that we will deliver full year EBIT toward the upper end of our previously communicated range of £125 million-£131 million.

In February the proposed merger with A.G.Barr lapsed when referred to the Competition Commission, which will release its final decision on the transaction in July. At that point Britvic will reconsider completing the merger.

Along with the cost-savings initiatives outlined above, which include the closure of two factories and a warehouse, the group is planning to increase investment by £10 million per year by 2015 in the international business. There has already been a partnership agreement with Narang Group to sell Fruit Shoot in India from mid-2014. Investors have reacted positively to what is a hugely encouraging set of results and initiatives: The share price is up 11% as of 9:30 a.m. EDT. The market clearly feels Britvic has significant opportunity for further growth.

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