Fruit Shoot recall debacle leads to 19% slump in Britvic profits
SOFT DRINKS group Britvic posted a well-flagged slide in profits today, triggered by the recall of newly-designed bottles of its Fruit Shoot drink in the summer.
The J20 to Tango group, which recently struck a £1.4 billion merger deal with Scottish drinks company AG Barr, saw pre-tax profits fall 19 per cent to £84.4 million from £105m.
Britvic said it had taken a near-£17m provision to cover the cost of the recall of all bottles of the children’s drink and spin- off product, Fruit Shoot Hydro, due to safety concerns with faulty caps.
However, the Hertfordshire-based group, whose profits were also hit by a rainy summer, said yesterday that production of Fruit Shoot would return to normal by January.
Britvic, which also makes Pepsi under licence in Britain, said the product recall had overshadowed a strong performance in its carbonated drinks business. Despite this, total group volumes were down 1.6 per cent to 2.1 billion litres, with revenue down 0.8 per cent at £1.3bn.
Wayne Brown, analyst at broker Cannaccord Genuity, said while Britvic’s results were slightly ahead of expectations it “should not cloud what has been a poor year for the group”.
Britvic’s all-share deal with Cumbernauld-based Barr, whose flagship product is Irn-Bru, will create one of Europe’s largest soft drinks businesses, Barr Britvic Soft Drinks.
The enlarged company will result in a 63 per cent stake for Britvic investors, with Barr shareholders holding the remainder. The group will be run by Barr chief executive, Roger White.
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