Britvic Falls as Irish Charges Trigger Full-Year Loss
Britvic Plc, the maker of Robinson’s fruit drinks, fell the most since May in London trading after reporting its first full-year loss in at least seven years on writedowns and restructuring charges at its Irish unit.
The shares fell 2.9 percent, after earlier dropping as much as 9.3 percent. Britvic posted a net loss of 48.2 million pounds ($75.4 million) in the 53 weeks ended Oct. 3, compared with a profit of 46.8 million pounds for the 52 weeks ended Sept. 27, 2009, the Chelmsford, England-based company said in a statement. Revenue climbed 16 percent to 1.14 billion pounds, after the May acquisition of Britvic France.
Britvic booked a one-time impairment charge of 104.2 million pounds on the value of Britvic Ireland’s intangible and property assets, in addition to a 5.7 million-pound restructuring charge. Chief Executive Officer Paul Moody said today on a conference call he didn’t expect any “near-term” changes in the value of the Irish business that would require further write-downs.
Britvic fell 14.4 pence to 476.2 pence at the 4:30 p.m. close in London, giving the company a market value of 1.14 billion pounds.
Britvic spent about 249 million euros ($328 million) in 2007 to expand into Ireland by buying Dublin-based C&C Group Plc’s soft-drink unit. Ireland fell into its worst recession in modern history after the country’s 10-year property bubble burst in 2008, forcing the country to take a 67.5 billion euro international bailout last month and pushing unemployment to 13.5 percent.
Moody said the company expects to reach “closure” on a restructuring plan for the company’s Irish business in “a month or two.” Irish management are in talks with employees and their unions about changes at the business, Moody said, declining to comment on potential job cuts.
Revenue at Britvic’s British carbonates and stills operations climbed in 2010, as the company continue to gain market share. The company announced a full-year dividend of 16.7 pence per share, an increase of 11 percent.
Britvic expects “challenging conditions” in each of its markets related to cost pressures in a “difficult consumer environment” Moody said today. The soft-drinks market is likely to “perform well” even if economic conditions deteriorate next year, as expected, according to Moody, because of the products low cost and “staple” characteristic.
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