Britvic's Fruit Shoot drinks brand now available in US; announcement comes following company's 15-year agreement with PepsiCo Americas Beverages signed in November 2013 to distribute product in 41 states
May 21, 2014
– Consumers across the US will now be able to quench their thirst with Fruit Shoot after brand owner Britvic completed a nationwide distribution deal.
The company signed a 15 year deal with PepsiCo Americas Beverages in November to distribute Fruit Shoots in 41 states and now further deals with PepsiCo and other bottlers has given it full coverage. It also plans to launch the drink in India in around five weeks time as it continues to drive the international growth of its products. Chief executive Simon Litherland said:
[The US distribution] is another important milestone towards establishing the brand as a leader in the kids drinks category. [In India] there will be a major consumer campaign aligned to the Diwali festival [later in the year].
The news came as the company, which also makes Tango and Robinsons squash and distributes Pepsi and 7UP in the UK, reported a 20.8% rise in first half profits to £45.3m. It said it was on target to make £30m of cost savings by 2016, with factories in Huddersfield and Chelmsford already closed down. The company's shares have bubbled up 38p to 732.5p. Analyst Nicola Mallard at Investec said:
A good first half result, which sets the group on track to deliver 2014 earnings before interest and tax in its indicated range of £148m-£156m. Most of the work behind the delivery of the new strategy is now complete (new management teams and factory closures) and the benefits should start to flow through from the second half. US progress continues with Fruit Shoot now nationally available. We make no changes to our forecast or 716p target price and we retain our hold recommendation.
Britvic has delivered a good first half profit uplift of 21% to £45.3m, slightly ahead of our forecast of £42.2m. There were some large moving parts half on half – this was due to the absence of Fruit Shoot costs of £8m, which impacted last year but also an increase in advertising and promotion spend of £9m this year so these largely balance out.
We forecast [full year profits of] around £150.5m, which we are not changing today. This compares with £135m last year, but the warm summer added around £5m to this and may or may not be repeated. Risks include a grocery price war or imposition of a sugar tax.
Oriel Securities analyst Chris Wickham issued a buy note:
This is a good set of numbers and with a strong start to the second half, we are comfortable with a forecast at the top of the company's full year guidance range of £148m to £156m.
While the tax charge may be half a point higher than envisaged, earnings per share growth close to 20% is still possible in 2014. Trading at discounts to its chief UK soft drinks peers and the international group, Britvic's shares should clearly be bought.
(c) 2014 Guardian Newspapers Limited.