Soft drinks maker and supplier, Britvic, has reported a significant boost in profits, thanks to the “standout” sales of flavoured Ballygowan waters in Ireland, as well as Pepsi Max and Tango in Britain. The company’s CEO, Simon Witherland, announced in its half-year earnings report that the company had “mitigated” escalating costs inflation in 2022, by focusing on lower calorie, healthier drinks. The London-listed shares have now gained 21% since the start of the year, valuing the drinks firm at almost £2.4bn (€2.75bn).
Pre-tax profits rose 18.5% to £54.4m, with sales increasing 10.4% to £794m in the first six months of its financial year, which runs to the end of March. Mr Witherland said that Britvic had “successfully mitigated the impact of the challenging inflationary environment”, adding that it planned new marketing campaigns over the summer months. The company has also secured a contract with Flogas to source wind power for its Newcastle West plant.
In Ireland, Ballygowan ‘Hint of Fruit’ secured €6m in sales, representing a share of the flavoured water drinks market of 18%, just a year after its launch. In its main British market, Britvic said its early moves in the first half of the latest financial year to increase prices had paid off and had mitigated double-digit inflation in its costs of the previous year. The company has also seen a sequential improvement in volumes as it moved onto Q2, returning to volume growth and building momentum as it heads towards the key summer trading period. However, in France, “trading has been more challenging in the highly competitive retail market”, the company said, citing “difficult” talks over pricing and having faced “double-digit inflation with minimal price benefit to mitigate the impact”.
Britvic owns the Tesseire, Pressade, and Moulin drinks, and said its performance was mixed in its “growth market” of Brazil, after its margins had been hit. Despite the cost of living crisis, Britvic said consumers were still buying soft drinks. “While all companies have faced significant economic uncertainty and considerable inflationary pressures, the soft drinks category continues to demonstrate high levels of resilience. Soft drinks are an affordable staple, offering great quality and value choices for all occasions,” it said in its outlook.
“Our continued focus on lower calorie, healthier drinks has resulted in some standout performances, including Pepsi Max and Tango in Great Britain as well as Ballygowan ‘Hint of Fruit’ in Ireland,” said Mr Witherland. Britvic, which owns outright MiWadi and Robinsons, and distributes Pepsi, 7UP, and Lipton Ice Tea in Ireland and Britain under license with PepsiCo, has also planned new marketing campaigns over the summer months.