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Britvic 2020 adjusted profit to beat views, PepsiCo agreement announced

By Michele Maatouk

Date: Tuesday 20 Oct 2020

Britvic 2020 adjusted profit to beat views, PepsiCo agreement announced

(Sharecast News) - Britvic said on Tuesday that adjusted profit for 2020 is expected to be slightly ahead of current market consensus after better-than-expected trading over the summer, as it announced a new and exclusive bottling agreement with PepsiCo.
The company said trading has benefited from the limited re-opening of the UK hospitality sector since early July and continued strong trading in the at-home channel across its markets. The year-end adjusted net debt balance is expected to be around £40m to £50m lower than last year, "reflecting disciplined cash management", it said.

"Looking forward, the economic outlook for 2021 remains uncertain. The re-introduction of further lockdown restrictions and the impact of social distancing measures on capacity in the hospitality sector will, undoubtedly, continue to have an impact on Britvic's performance in 2021.

"However, Britvic is confident in its long-term prospects and anticipates rebuilding investment in 2021 behind its long-term growth drivers, including innovation and marketing, as well as its commitment to sustainability through its strategic priority of 'Healthier People, Healthier Planet'."

The group said that following stronger-than-anticipated trading across the peak summer period, it now expects 2020 adjusted earnings before interest and tax to be a slightly ahead of market consensus.

Britvic also announced an agreement with PepsiCo for a new and exclusive 20-year franchise bottling agreement for the production, distribution, marketing and sales of its carbonated soft drink brands in Great Britain.

This extends the relationship that began in 1987 to the end of December 2040 and includes the Rockstar energy brand.

The company also said it plans for all plastic bottles in GB to be made from 100% recycled plastic by the end of 2022. This is three years earlier than originally planned and ahead of the previous target of 50%.

Chief executive Simon Litherland said: "I am delighted that we have formally extended our relationship with PepsiCo in Great Britain for a further 20 years. The powerful combination of the Britvic-owned and PepsiCo portfolio offers customers and consumers a broad range of great-tasting, trusted brands for any occasion.

"We are excited to add Rockstar to our offering and look forward to working together to grow the brand."

At 0807 BST, the shares were up 3.4% at 776p.

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