July 11 (Bloomberg) -- Britvic Plc, the maker of Robinsons fruit drinks, fell the most in six years after saying full-year results will be “at the bottom end” of analysts’ estimates and a recall of its Fruit Shoot products will hurt earnings further.
Business conditions haven’t improved since May’s first-half results, the Chelmsford, England-based company said today, citing unseasonably wet weather and lackluster consumer sentiment. Losses from the recall will reduce pretax profit by about 15 million pounds ($23.3 million) to 25 million pounds this financial year and next, it said in a statement.
The shares fell as much as 15 percent to 254.8 pence, the lowest price since June 23, 2009 and biggest decline since May, 2006. The projection for profit to miss estimates doesn’t include the impact of the Fruit Shoot recall, Britvic said. The beverage maker was anticipated to report pretax profit of 106.2 million pounds this year, according to the average estimate of 12 analysts surveyed by Bloomberg.
“Today’s announcement confirms our worst fears,” Wayne Brown, an analyst at Cannacord Genuity in London, wrote today. “This news, in addition to the structural challenges that Robinsons is facing, some market-driven and additional mishaps, underpins our major concern that forecast visibility remains very low.” Brown has a “sell” rating on the stock.
Britvic said July 3 it started to recall Fruit Shoot and Fruit Shoot Hydro packs in the U.K. because of safety concern over new packaging. The drinks, aimed at children, had a “small number of damaged caps,” which could have come detached, it said at the time.
The company has been unable to “speedily” resolve the issues, and will start to resupply products in six weeks with a previously tested stopper. Britvic had previously estimated a reduction in profit of 1 million pounds to 5 million pounds this year as a result of the recall.
The company will release third-quarter trading and further details on July 19, it said today.
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