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Britvic has hailed an “excellent” first-half performance as rising volumes helped the soft drinks giant boost revenues and profits.
In the six months to 31 March, the group reported a 4.4% increase in volumes thanks to “strong” consumer demand for its brands, including “standout” growth for Pepsi Max, Ballygown, Fruit Shoot and Lipton.
Volumes accelerated through the half, moving from a rise of 1.7% in the first quarter to 7.4% in the second.
It contributed to a 11.2% increase in revenues to £880.3m and a 17.7% jump in adjusted EBIT to £100.4m.
As a result, Britivic increased its interim dividend by 15.9% to 9.5p and announced a third share buyback programme for up to £75m over the next 12 months.
CEO Simon Litherland said he was “delighted” with the “excellent” first-half performance.
“Our market-leading growth comes from the combination of another strong performance from our scale family favourite brands, coupled with accelerated growth in Brazil and across multiple new growth spaces, such as London Essence, Aqua Libra and Plenish,” he added.
“We have increased the investment behind our brands by over 38% in the period. Looking forward, I am confident that we will deliver a strong full-year performance.”
In Great Britian, where the group owns the likes of Fruit Shoot, Robinsons, Tango, J2O, Plenish and Jimmy’s Iced Coffee, as well as holding the licence to sell Pepsi, 7UP and Lipton Ice Tea, Britvic reported an 8.8% rise in revenues to £592.2m.
Volumes in the half increased 2.6% in the country.
Britvic highlighted Pepsi as the key growth driver, with revenues up 8.5%. However, it also highlighted a “truly outstanding” half for Plenish, with revenues soaring 168.5%.
Morning update
Revenues and profits at Imperial Brands have taken a hit despite price hikes and a rising take-up of vaping as the tobacco giant faced currency headwinds.
A 8.6% increase in tobacco pricing helped offset a 6.3% decline in volumes in the first half to 31 March.
Revenues fell 2.3% to £15.1bn, while operating profits tumbled 2.6% to £1.5bn.
However, the group said tobacco and next-generation product revenues increased 2.8% in the half - the strongest organic growth in more than ten years.
NGP revenue alone grew by 16.8% as strong growth in Europe and Australasia, Africa, Asia and Central & Eastern Europe more than offset declines in the US.
NGP now represents about 7% of total group revenue in Europe, with adjusted losses in the category reducing to £50m thanks to improved gross margin, volume growth and continued investment in new product launches.
Group adjusted operating profits grew 2.8% in the half thanks to the improved profitability in tobacco and NGP.
CEO Stefan Bomhard said: “Pricing actions in tobacco taken in the first half and good momentum in NGP gives us confidence in our ability to deliver full-year results in line with our guidance.”
Catering giant Compass Group has raised profit expectations for the year after revenues increased 11.2% to $20.9bn and operating profits rose 18.7% to $1.5bn in the six months to 31 March.
CEO Dominic Blakemore said the group had delivered a “strong set of results”, with balanced double-digit organic revenue growth and “good” underlying operating margin progression across all regions.
Organic revenue growth of 11.2% was made up of 3.7% from new business, 5% higher prices and 2.5% like-for-like volume growth.
“As a result of our strong first-half performance and positive outlook, we are raising guidance for underlying operating profit growth to towards 15% for the full year,” Blakemore added. “Beyond 2024, we expect to sustain mid to high single-digit organic revenue growth, ongoing margin progression and profit growth ahead of revenue growth.”
The FTSE 100 is up 0.5% this morning to 8.466.45pts.
London’s blue-chip index was helped by shares in Britvic soaring 8.2% to 993p thanks to the announced buyback.
Imperial Brands is also up 2.4% to 1,923.5p but Compass fell back 3.1% to 2,249p.
Yesterday in the City
The FTSE 100 edged up 0.2% to 8,428.13pts yesterday.
Despite a steady first-quarter update from Greggs, shares in the high street baker fell 1.9% to 2,766p. Investors focused on trading not quite remaining at the high levels at the start of the year and warnings that the business is operating in a ‘challenging’ market.
Conversely, Treatt leapt by 4.2% to 493.1p after the drinks suppliers reported an acceleration in sales in the second quarter.
Elsewhere, risers included Ocado, which shot up 7.2% to 366.7p, and Just Eat Takeaway, which jumped 6.7% to 1,238p.
Nichols fell 3.3% to 1,020p, Virgin Wines was down 4.2% to 46p and Science in Sport dropped 4.8% to 16p.
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