Portfolio

Britvic loses its fizz on Shore downgrade to 'hold'

By Michele Maatouk

Date: Tuesday 14 Nov 2017

Britvic loses its fizz on Shore downgrade to 'hold'

(ShareCast News) - Britvic was under the cosh on Tuesday as Shore Capital cut its stance on the drinks maker to 'hold' from 'buy' ahead of its preliminary results on 29 November.
The brokerage argued that the market has not built in any potential impact from the soft drinks levy into FY2018F expectations. "With this creating potential downward pressure on earnings post a reasonably solid re-rating of the shares we downgrade," it said.

On the bright side, though, it expects the company to have delivered operational progress in the year while navigating the return to inflationary market conditions.

Shore reckons Britvic will deliver on market expectations for its FY2017 results and the brokerage is forecasting earnings before interest, tax and amortisation of £192m, which is at the top end of a company compiled consensus range of £185m to £193m. Consensus pre-tax profit and earnings per share are pencilled in at £157.8m and 49.3p, according to Bloomberg data, compared to Shore's forecasts of £153.9m and 49.9p.

"We anticipate Q4 to have been more challenging with a less beneficial weather backdrop in core markets as well as tough comparatives. However, we still expect a solid financial performance for the year with (broadly flat) profitability in line with market expectations."

At 1550 GMT, the shares were down2.8% to 743p.

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