Britvic Reports Sales Slide on Fruit Shoot Recall, Wet Weather
Britvic Plc (BVIC), the maker of Robinsons fruit drinks, reported a drop in third-quarter sales after wet summer weather stinted purchases and it recalled Fruit Shoot products in most of its markets because of a packaging defect.
Revenue fell 5.1 percent at constant exchange rates, the company said today, hurt by declines in the U.K. and Ireland, which together account for almost four-fifths of sales.
The Fruit Shoot recall reduced revenue by about 2 percent in the quarter, the company said. Britvic starting recalling packs of the children’s drink in the U.K. this month because caps could have become detached. That action, combined with weak consumer spending and poor weather, means full-year results will be at the bottom end of estimates, it said on July 11.
Revenue at the company’s international unit slid in the quarter as the Fruit Shoot recall “materially impacted” the division’s exports markets, particularly in the Netherlands and Belgium, the company said. That offset “strong” sales in the U.S. In France, revenue increased 4.3 percent.
“The weak consumer environment and very disappointing weather at a key time for soft drink sales have had a marked impact,” Chief Executive Officer Paul Moody said in the statement. “The decision to recall Fruit Shoot resulted in a further negative impact. Our resources will be fully focused on re-establishing Fruit Shoot in the market as soon as possible.”
Britvic rose 1.8 percent to 291.4 pence at 8:09 a.m. in London trading, paring the decline this month to 12 percent.
Total sales in the quarter declined 7.6 percent to 300.1 million pounds ($470 million), the company said.
Britvic cut its full-year target for capital spending to about 50 million pounds from 70 million pounds following the product recall. The company said it’s reviewing plans for 2013 and expects a reduction compared with previous projections.
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