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Britvic dividend in doubt as it forecasts £18mln hit to monthly earnings from coronavirus crisis

The soft drink and fruit juice maker said the pandemic is expected to “significantly affect consumption” and it expected a “material impact” on revenue and earnings in 2020

Britvic PLC - Britvic dividend in doubt as it forecasts £18mln hit to monthly earnings from coronavirus crisis

Britvic PLC (LON:BVIC) is considering whether to postpone its interim dividend in its coming results as it predicted the coronavirus outbreak could knock up to £18mln off its monthly earnings.

The maker of Robinsons fruit juice said the recent closure of trade outlets and restrictions on the movement of people in its main markets will “significantly affect consumption” of its products and therefore they expected a “material impact” on revenue and earnings in 2020.

READ: Britvic secures £400mln credit facility linked to sustainability goals

While the firm said it was too early to predict the full effects of the pandemic, based on its modelling earnings (EBITA) are expected to be reduced by £12-£18mln each calendar month if current trading conditions persisted.

As a result of the uncertainty, Britvic said it will “reflect” on whether it will recommend or postpone a dividend in its interim results, which are due on 20 May.

The company added that it is taking a number of actions to mitigate the impact of the downturn on its profits, including cost controls and “reduced discretionary spend” across its business.

“Soft drinks has historically been a resilient category in any downturn. Britvic starts from a strong financial position and we are taking further action to protect our cashflow and profitability”, said Britvic chief executive Simon Litherland.

“Our brands' consumer appeal is enduring in good times and bad, and we are confident in our ability to bounce back strongly as normality returns. The long-term investment case for Britvic remains intact. In the short term our priorities remain the welfare of our people, maintaining the availability of our products to consumers through our diverse customer base, and sound financial management of the business", he added.

The shares slumped 7.6% to 589p in early trading on Monday.

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Quick facts: Britvic PLC

Price: 782 GBX

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