A fantastic 2017, when the Robinsons and Tango-owner surged 42% across the year, left Britvic (LON:BVIC) in a very good position heading into 2018. And the company initially seemed to capitalise on this solid footing, hitting an all-time high of £8.24 in mid-January.
Yet investors quickly soured on the stock. A poorly received Q1 statement at the end of January was responsible for the brunt of its losses, a decline that eventually left it bouncing off 11 month lows of £6.60 in late March. Since then it has begun to recover, rising to a 3 and a half month high of £7.60 in mid-May, before pulling back to a current trading price of £7.52.
On the surface the aforementioned first quarter update was good, with total group revenue rising 3.3% at a constant currency basis to £337.2 million. The 16.5% and 22.6% growth seen in Ireland and Brazil respectively, the latter lifted by the acquisition of Bela Ischia, alongside a solid 4.9% increase from GB Carbonates helped counter the 6.6% slide in GB Stills, the 5% decline in France and the 8.1% drop in the International division.
These numbers were overshadowed, however, by the fact that the closure of the company’s factory in Norwich in favour of a new production set-up in Rugby will cost as much as £40 million. That and the continued uncertainty about the then-impending sugar tax in the UK and Ireland.
Though it only came into force in April, the sugar-tax will likely be the focus of Thursday’s interim report, with investors keen for some kind of statement on its early impact. As for its figures, analysts are expecting a 3.5% jump in revenue, but with earnings per share roughly flat year-on-year.
Britvic PLC has a consensus rating of ‘Hold’ alongside an average target price of £8.41.
Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved.