Britvic plunges into red as Ireland wipes fizz off values

By Rupert Steiner for the Daily Mail
Updated: 04:55 EDT, 3 December 2010

Britvic saw the value of its Irish business plunge by a staggering £104m due to the effect of the economic crisis hitting the former Celtic Tiger.

CEO Paul Moody: 'Ireland has felt the economic downturn more acutely'

The Tango to Robinson's drinks maker was forced to write down the value of its property and brands in the country, taking the fizz out of the group's full-year figures.

The unexpected charge caused the carbonated drinks firm to tumble into the red for the 53 weeks to October 3.

Britvic posted a £28.8m loss, down from profits of £66.2m the year before, but once the exceptional charge was excluded, profits actually rose from £86.5m to £109.1m.

Revenues grew to £1.1bn from £978m and the firm hiked its full-year dividend to 16.7p-a-share from 15p.

The poor trading in Ireland, which accounts for 12% of group sales, sent a shiver into the market and caused the shares to fall 3%.

Britvic's exposure to Ireland was amplified in 2007 when it acquired the soft drinks arm of rival C&C, adding Ballygowan mineral water to its brands.

Chief executive Paul Moody said trading in the country was under pressure because of aggressive promotions by supermarket rivals and the departure of 300,000 immigrant workers.

'Consumers have also been buying our drinks in big supermarkets rather than convenience stores, which has impacted our margin,' he said. 'Ireland has felt the economic downturn more acutely than other markets.

'We continue to focus our efforts on re-shaping the Irish organisation.' Britvic, which owns the rights to sell Pepsi in Britain and Ireland, also made an £11.4m write-down on the value of three other minor British brands - Ame, Aqua Libra and GB Red Devil.

Moody was upbeat about future trading but warned of rising input prices for Britvic (down 14.4p to 476.2p).

'A weak apple harvest in central Europe has sent prices rising,' he said.

'This has been compounded by a shortage of apples being used for making juice because of a rise in the number of Chinese people eating apples as edible fruit.' Plastic prices have also risen sharply because of its increased use in synthetic clothing and antifreeze, he said.

On the prospects for 2011, Moody said: 'Whilst we expect the consumer and cost environment to remain challenging, we are confident in our ability to compete strongly.'