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Britvic profits lose fizz as UK sales flatten off

Profit before tax slumped 32% thanks to closing Fruit Shoot operations in the United States and costs related to the proposed sale of the juice manufacturing sites in France

Britvic PLC - Britv
Britvic, which produces J2O and Tango, said that overall revenues were up 1.4% to £1.5bn

Britvic PLC (LON:BVIC) said sales of its fizzy and still drinks suffered due to worse summer weather in UK, as it mulls the disposal of key juice manufacturing sites in France.

The maker of J2O and Tango reported a 32% slump in full-year profits to £110.3mln as it absorbed extra costs related to the proposed French sale and from the closure of the Fruit Shoot operation in the US earlier in the year.

READ: Britvic mulls over bottling facilities sale

Revenues bubbled up 1.4% to £1.5bn in the year to the end of September as the FTSE 250-listed drinks company said “softer consumer demand” had hurt its main market, the UK, where volumes declined 1.3% against a tough comparison with last year's long hot summer.

Carbonated drinks declined less steeply this year as there was no repeat of the carbon dioxide shortage.

Sales in France were “particularly disappointing” in the second half, in part reflecting the introduction of the 'EGalim' law earlier in the year that increased prices for branded products and limited retailer margins.

Britvic added that talks are underway with employee representatives for the potential sale of facilities located in France to Dutch group Refresco, the world’s largest independent bottler, after first announcing the disposal earlier in November.

“The proposed transaction would complete in spring 2020, creating a smaller but higher margin business in France,” the company said.

It added: “While the current macro-economic environment remains uncertain, we do expect to make further progress in 2020."

Liberum gave it a 'hold' recommendation, with a target price of 1,000p, saying revenues were "80 basis points behind consensus estimates".

"The guidance statement is light on the detail but we suspect consensus FY2020 to come down a few percentage points," the broker added.

Shares fell almost 3% to 958p in early trading on Wednesday.

--Adds share price and broker comment

Quick facts: Britvic PLC

Price: 782 GBX

LSE:BVIC
Market: LSE
Market Cap: £2.09 billion
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