Irish expansion costs Britvic dear as it unveils £48m loss and shares dip

Soft drinks maker Britvic yesterday counted the cost of its expansion into Ireland as it recorded bottom-line losses of £48.2 million and saw its shares fall 3 per cent.

The group, whose UK brands include Robinsons, Tango and Fruit Shoot, took a write-down of 104.2m on the value of its Irish business and said it was carrying out a strategic review of its operations there, after the country's economic woes took their toll on the soft drinks market.

The move effectively halves the value of the group's Irish business, C&C Soft Drinks, which it paid some €250m (212m) for in 2007, when it first entered the country.

It said the economic problems in Ireland, which accounts for 13 per cent of the group's revenues, led to consumers being more cautious and spending less on higher-margin "on the go" drinks, opting instead to buy them in supermarkets and consume them at home.

Despite the Irish woes, Britvic reported a 22 per cent rise in pre-tax profits at an underlying level to 109.1m during the 53 weeks to 3 October, as it grew its market share in Britain. It is paying a full-year dividend of 16.7p, up from 15p a year ago.

The UK's second-biggest soft drinks maker said it had continued to pursue its strategy of promoting its leading brands, as well as launching new products and expanding further overseas.

It said Pepsi, which it owns the rights to sell in the UK and Ireland, had continued to grow its share of the cola market, following the introduction of a new 600ml bottle for its sugar-free varieties.

Robinsons maintained its position as the country's number one squash brand, while Fruit Shoot continued to be the top children's drink.

Innovations during the year included launching US brand Mountain Dew as an energy drink in the UK. The firm said although it was still early days, sales of the drink had surpassed its high expectations.

It also expanded further into mainland Europe through the acquisition of Fruite Entreprises, now known as Britvic France, for €237m in May.

But Britvic said the pub and club soft drinks market in Britain faced continuing challenges after the World Cup failed to give a boost to the sector.

It added that the uncertain consumer environment looked set to continue in this area during 2011.

Revenues across the business were up 15 per cent at 1.14 billion, with the group selling 1.9 billion litres of soft drinks during the year.

Chief executive Paul Moody said: "Britvic has again demonstrated its ability to grow the business despite the difficult conditions in the wider economy.

"The group's extensive brand innovation plans, combined with satisfactory trading in the first few weeks of the new financial year, mean we are in good shape to deliver another robust set of results for the year ahead."