TIDMBVIC
RNS Number : 2724F
Britvic plc
22 May 2013
Britvic plc Interim Results - 22 May 2013
Britvic plc announces its interim results for the 28 weeks ended
14 April 2013(1)(2)
Financial Highlights:
-- Strong profit growth with EBITA of GBP53.6m up 27.6% on prior
year and EBITA margin up 180 basis points
-- Underlying EBITA up 17.9% when adjusted for one off and
phasing items, demonstrating a materially improved financial
performance
-- Strong margin and pricing growth in every business unit. Group revenue up 0.4%
-- Significant progress in improving free cash flow conversion,
resulting in reduction of group adjusted net debt by GBP30.7m
-- Adjusted earnings per share up 47.6% to 12.4p and dividend increase of 1.9% to 5.4p
Strategic Highlights:
-- Announcement of a new strategy which will accelerate growth
of the core and international business
-- Major initiatives, underpinning the strategy, will deliver
annual savings of GBP30m by 2016. These include proposals to close
two factories in GB and a warehouse in Northern Ireland as well as
the creation of a combined GB and Ireland business unit under a
single leadership team
-- Increase in investment of GBP10m per annum by 2015 in the
International business unit to accelerate the realisation of the
increasing growth potential of our brands internationally
-- Agreement reached with Narang Group for the national sales
& distribution of Fruit Shoot in India, commencing mid-2014
28 weeks 28 weeks % change % change
ended 14 ended 15 actual exchange constant(2)
April 2013 April 2012 rate exchange
GBPm(1) GBPm (1) rate
------------------------- ------------ ------------ ----------------- -------------
Group Revenue 639.2 641.1 (0.3)% 0.4%
Group EBITA(3) 53.6 41.9 27.9% 27.6%
EBITA Margin(3) 8.4% 6.5% 190bps 180bps
Group EBIT 52.0 40.4 28.7% 28.1%
Group Profit Before
Tax 37.5 24.8 51.2% 50.0%
Group Profit After
Tax 28.5 18.7 52.4% 50.8%
Group Profit After
Tax, After Exceptional
And Other Items 24.7 18.7 32.1% 31.4%
Adjusted Earnings Per
Share(4) 12.4p 8.4p 47.6% 47.6%
Weighted Average No.
of Shares 242.4 241.4 0.4% n/a
Interim Dividend Per
Share 5.4p 5.3p 1.9% n/a
Underlying Free Cash
flow (5) (24.4) (47.1) 48.2% n/a
Group Adjusted Net
Debt (6) (503.7) (534.4) 5.7% n/a
------------------------- ------------ ------------ ----------------- -------------
The board is proposing an interim dividend per share of 5.4p
ahead of last year by 1.9%. This reflects the board's confidence in
the future prospects of the business, the stronger free cash flow
generation and our stated dividend policy.
Simon Litherland, Chief Executive commented:
"Britvic has delivered strong first-half profit growth, a
material improvement in cash flow and a reduction in net debt. This
has been achieved by growing our average realised price, a
continued focus on cost and the substantial progress we have made
in improving the underlying strength of our business.
Today we have announced a new strategy which will lead to a step
change in performance and improved returns for shareholders. We
intend to change our operating model to generate stronger
performance in our core markets and accelerate the increasingly
attractive international opportunities, underpinned by a reduction
in the cost base of GBP30m per annum by 2016.
Based on our strong interim results and the exciting marketing
activity we will be executing in the second half of the year, we
are confident that we will deliver full year EBIT towards the upper
end of our previously communicated range of GBP125m - GBP131m."
Gerald Corbett, Chairman commented:
"The proposed merger with A.G. Barr lapsed on 13 February when
the transaction was referred by the Office of Fair Trading to the
Competition Commission.
The Competition Commission is expected to announce its final
decision by the end of July. The board will then decide, in light
of the Competition Commission's decision, whether a transaction on
the right terms with appropriate management and governance
arrangements, can be consummated in the interests of
shareholders.
In the meantime, as we approach our busiest time of year, the
management team, under our new Chief Executive, is totally focused
on executing its new strategy, continuing the momentum established
in the first half and delivering on the vision of a growing,
international and increasingly profitable Britvic."
For further information please contact:
Investors:
Rupen Shah / Steve Nightingale +44 (0)1442 284330
Media:
+44 (0)7808 098579 / +44 (0)7808
Susan Turner / Marisa Fitch 098292
Mike Smith/Nick Cosgrove (Brunswick) +44 (0)207 4045959
There will be a live-webcast of the presentation given today at
9:30am by Simon Litherland (Chief Executive) and John Gibney (Group
Finance Director). The webcast will be available at
http://ir.britvic.com/, with a transcript available in due course.
There will also be a conference call today at 2.00pm (9.00am
Eastern Standard Time) for investors and analysts with an
opportunity to ask questions.
UK Access Number +44 (0)20 3139 4830
UK Toll Free 0808 237 0030
US Access Number +1 718 873 9077
US Toll Free +1 866 928 7517
Participant PIN Code 23042765#
A recording of the call will be available for seven days.
UK Toll Access Number +44 (0)20 3426 2807
UK Toll Free Number 0808 237 0026
US Toll Free Number +1 877 846 3918
Conference Reference 639312#
Definitions
(1) All numbers are before exceptional and other items unless
otherwise stated. As previously communicated, volume and ARP are no
longer adjusted for the impact of double concentrate on Robinsons
and MiWadi as we have a full year of prior history. Last year's non
adjusted numbers were made available at the Investor Centre
"Results and Presentations" section on the Britvic Investor
Relations website at www.britvic.com
(2) Where appropriate comparisons are quoted using constant
exchange rates. Constant currency growth removes the impact of
exchange rate movements during the period by retranslating prior
year foreign currency denominated results of the group at current
period exchange rates to aid comparability.
(3) EBITA is defined as operating profit before exceptional and
other items and amortisation. Only amortisation attributable to
intangibles related to acquisitions is added back, in the period
this is GBP1.6m (2012: GBP1.5m as reported last year). EBITA margin
is the EBITA as a proportion of group revenues.
(4) Adjusted earnings per share amounts are calculated by
dividing adjusted earnings by the average number of shares during
the period. Adjusted earnings is defined as the profit/(loss)
attributable to ordinary equity shareholders before exceptional and
other items adjusted for the adding back of acquisition related
amortisation. Average number of shares during the period is defined
as the weighted average number of ordinary shares outstanding
during the period excluding any own shares held by Britvic that are
used to satisfy various employee share-based incentive programmes.
The weighted average number of ordinary shares in issue for
adjusted earnings per share for the period was 242.4m (2012:
241.4m).
(5) Underlying free cash flow is defined as net cash flow
excluding movements in borrowings, dividend payments and
exceptional and other items.
(6) Group adjusted net debt is defined as group net debt, adding
back the impact of derivatives hedging the balance sheet debt.
Reconciliation from Actual Exchange Rate to Constant Exchange
Rate
H12012 actual Change H12012 constant
exchange rate GBPm exchange rate
GBPm GBPm
------------------------------ --------------- ------- ----------------
Group Revenue 641.1 (4.4) 636.7
------------------------------ --------------- ------- ----------------
Group EBIT 40.4 0.2 40.6
------------------------------ --------------- ------- ----------------
Group Profit Before Tax 24.8 0.2 25.0
------------------------------ --------------- ------- ----------------
Group Profit After Tax (PAT) 18.7 0.2 18.9
------------------------------ --------------- ------- ----------------
Group PAT, After Exceptional
And Other Items 18.7 0.1 18.8
------------------------------ --------------- ------- ----------------
Group EBITA (3) 41.9 0.1 42.0
------------------------------ --------------- ------- ----------------
Adjusted Earnings Per Share
(4) 8.4p 0.0p 8.4p
------------------------------ --------------- ------- ----------------
The interims results announcement for the 28 week period ended
14 April 2013 has been prepared in accordance with International
Financial Reporting Standards as adopted by the European Union.
Interim results do not constitute statutory accounts within the
meaning of Section 434 of the Companies Act 2006 and have not been
delivered to the registrar. The 52 weeks ended 30 September 2012
results have, however, been extracted from the statutory accounts
for the 52 week period ended 30 September 2012 on which an
unqualified report, which did not contain an emphasis of matter
reference or a statement under section 498 (2) or (3) of Companies
Act 2006, has been made by the company's auditors.
Notes to editors
About Britvic
Britvic is one of the leading branded soft drinks businesses in
Europe. The company leverages its own leading brand portfolio
including Robinsons, Tango, J(2) O, Fruit Shoot, Teisseire and
MiWadi as well as PepsiCo brands such as Pepsi, 7UP and Mountain
Dew Energy which Britvic produces and sells in GB and Ireland under
exclusive PepsiCo agreements.
Britvic is the largest supplier of branded still soft drinks in
Great Britain ("GB") and the number two supplier of branded
carbonated soft drinks in GB. Britvic is an industry leader in the
island of Ireland with brands such as MiWadi and Ballygowan, and in
France with brands such as Teisseire and Fruité. Britvic is growing
its reach into other territories through export, licensing and
franchising. Britvic's management team has successfully developed
the business through a clear strategy of organic growth and
international expansion based on creating and building scale
brands. Britvic is listed on the London Stock Exchange under the
code BVIC and is a constituent of the FTSE 250 index.
Cautionary note regarding forward-looking statements
This announcement includes statements that are forward-looking
in nature. Forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the group to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Except as
required by the Listing Rules and applicable law, Britvic
undertakes no obligation to update or change any forward-looking
statements to reflect events occurring after the date such
statements are published.
Market Data
GB take-home market data referred to in this announcement is
supplied by Nielsen and runs to 13 April 2013. Britvic GB pub &
club market data referred to in this announcement is supplied by
CGA and runs to 23 February 2013. ROI grocery market data referred
to in this announcement is supplied by Nielsen and runs to 24 March
2013. ROI pub and club market data is also supplied by Nielsen and
runs to the end of March 2013. French market data is supplied by
IRI and runs to 10 March 2013.
Next Scheduled Announcement
Britvic will publish its quarter three interim management
statement on 25 July 2013.
Chief Executive's Business and Strategy Review
In the 28 weeks ended 14 April 2013, Britvic grew group EBITA by
27.6% to GBP53.6m and EBITA margin was up by 180 basis points.
Underlying EBITA for the first half was up by 17.9% after adjusting
for the timing of our marketing programme and the one off cost of
the recall of Fruit Shoot. A focus on cash has resulted in an
improvement in free cash flow of 48.2% and a 5.7% reduction in
adjusted net debt.
These strong results were due to an improved underlying
performance across the business. We achieved strong pricing,
revenue, brand contribution and margin growth in all areas of the
business, with the exception of GB stills and Ireland. GB stills
was impacted by the limited supply availability of Fruit Shoot and
Ireland continued to be impacted by the performance of third-party
brands in the wholesaling business. Some of the performance
highlights were:
-- In GB stills, Robinsons continued to perform strongly,
growing its market share with double concentrate playing a
significant role. In the carbonates category we managed our
approach in the market, which resulted in price growth and despite
a small volume loss led to revenue growth ahead of the market.
-- Fruit Shoot's recovery is now firmly established across each
of our markets. In GB we have rebuilt distribution and market share
is on track to achieve pre-recall levels in the near future. In the
Netherlands and France, we have a stronger business today than
pre-recall, with measures such as distribution and rate of sale
above the levels of last July.
-- Britvic International and our franchising model, especially
in the US, gained further momentum. The roll out to 30 US states
has made excellent progress with distribution doubling to over
41,000 outlets in three months. We have also announced today a new
partner, Pepsi Cola Bottling Company of Pittsburgh, to distribute
Fruit Shoot in the states of Kansas and Missouri taking us to a
total of 32 US states ahead of the summer.
-- We also announce today that we have reached agreement with
the Narang Group for the national distribution of Fruit Shoot in
India, commencing mid-2014. The Narang group has a strong national
presence in consumer goods in India, including joint ventures with
Suntory and Danone and through distribution rights for brands such
as Monster, Twinings and Lindt.
However the market conditions in which we operate remained
challenging. During the second quarter each of our markets
experienced poor weather over March and Easter. The economic
backdrop continued to be difficult with consumer discretionary
spending remaining subdued. In the first six months of our
financial year, the take-home market in GB saw volume down by 1.7%
and in the last 12 weeks it declined by 2.6%, as measured by
Nielsen.
Despite this we achieved a significant turnaround in business
performance. Britvic has delivered an impressive first half
performance and we have strong momentum as we move into the second
half of the financial year with substantially increased levels of
marketing investment.
Since joining Britvic and becoming CEO I have been able to
consider the opportunities that we have, the challenges that we
face and our future direction. I see the potential to create one of
the most admired soft drinks businesses in the world by:
-- Becoming the benchmark integrated branded soft drinks
business for both PepsiCo and our own brands in GB &
Ireland
-- Fully exploiting global category opportunities in Kids, Family and Adult
-- Creating a simple focused operating model, empowering our
people and matching resource and capability to the
opportunities
-- Being a trusted and respected member of the communities in which we operate
To achieve this vision we have set out a new strategy to drive
market leading profit growth underpinned by margin enhancing
revenue. The strategy has two parts:
In our full portfolio markets of GB and Ireland we are proposing
to combine both businesses, leveraging our scale and common
strategy across both markets in a more cost effective way. We offer
a broad portfolio of brands and the relationship with Pepsi will
continue to be an integral part of our success. We will invest and
innovate to exploit our brand leadership of the Kids, Family and
Adult categories. Our objective is to establish a platform
resulting in GB and Ireland delivering sustainable market leading
value growth.
The international business and France will leverage our category
leadership of Kids with Fruit Shoot, Family with Robinsons and
Adult with Teisseire into new international markets. Our approach
will be "asset-light", as we select local, in-market partners. The
growth of the international business will deliver rapid revenue
growth that will be margin accretive once established and deliver
improvements to Britvic's return on capital employed.
Delivering this strategy successfully requires a lower cost
organisation focused on the growth opportunities, based on three
clear principles by which we will operate:
-- Simplicity: reduced complexity enabling faster decision
making and a lower cost operating model
-- Focus: fewer strategic priorities, matching resource and capability to execute stronger
-- Accountability: ensuring we have clear ownership to deliver performance
As a consequence we intend to transition to a simplifed
organisational structure. Additionally we have identified a series
of initiatives to achieve our strategy and step change the cost
base and profitability of the business:
1. Increase operational leverage through fewer manufacturing
sites by redistributing capacity, reducing the cost base and
improving our asset utilisation
-- Proposed closure of two manufacturing sites, Chelmsford and
Huddersfield in calendar Q1 2014
-- Ballygowan will replace current GB water brands, sourced from Ireland
-- Some Fruit Shoot capacity will be transferred to France, to
supply our growing European Markets
2. Fundamentally change the Irish operating model
-- Create a combined GB and Ireland business unit with a single leadership team
-- Separate licensed wholesale from the core branded business
-- Proposed closure of Belfast warehouse in calendar Q4 2013
-- Improve factory utilisation by the transfer of capacity from GB to Ireland
3. Transform our procurement and product optimisation initiatives
4. Implement a commercial change programme to ensure our brands
deliver strong and profitable revenue growth
As a result we will deliver GBP30m of annualised cost savings by
2016, of which GBP25m will be by 2015. The cash cost to deliver
these savings, net of property disposal proceeds in 2016, is
GBP40m. The initiatives proposed above along with a simplified
organisational structure will, subject to appropriate consultation,
lead to an overall reduction in our headcount of between 10% and
15%.
We regret the potential loss of jobs caused by the change and
are committed to supporting affected employees and we will of
course be consulting with our employees prior to implementing these
initiatives.
From the savings we will ramp up our incremental investment
against the international business to GBP10m per annum by 2015, to
realise the opportunties faster. We have not given any guidance
today about the return on this international investment but the
potential is becoming more tangible. The attractiveness of the
franchise system is well understood, high margin, low capital
investment with low risk.
I am confident that the execution of this strategy will build a
more successful Britvic and lead to a much stronger financial
performance.
Financial Review
The following is based on Britvic's results for the 28 weeks
ended 14 April 2013.(1), (2)
Key performance indicators
The principal key performance indicators that management use to
assess the performance of the group are as follows:
-- Volume growth - increase in number of litres sold by the
group relative to prior period.
-- Average Realised Price (ARP)- average revenue per litre sold.
-- Revenue growth - increase in sales achieved by the group relative to prior period.
-- Brand contribution margin- revenue less material costs and
all other marginal costs that management considers to be directly
attributable to the sale of a given product, divided by revenue.
Such costs include brand specific advertising and promotion costs,
raw materials, and marginal production and distribution costs.
Management uses the brand contribution margin to analyse Britvic's
financial performance, because it provides a measure of
contribution at brand level.
-- Operating profit margin- the group focuses on EBITA (earnings
before interest, tax and acquisition related amortisation) before
exceptional and other items as the key operating profit measure.
Margin is calculated by dividing EBITA by revenue. Each business
unit's performance is reported down to the brand contribution
level.
-- Underlying free cash flow- is defined as net cash flow
excluding movements in borrowings, dividend payments, exceptional
and other items.
Overview
In the period, total group volumes (excluding factored products
in Ireland) were 1,027.8m litres, ARP grew by 5.3% and revenue of
GBP639.2m was ahead of last year by 0.4% on a constant currency
basis.
The group focused on building sustainable profit and margin
improvement. Significant progress was achieved against this
objective, with EBITA up 27.6% to GBP53.6m and EBITA margin growth
of 180bps.
These results include a number of one-offs and phasing items
impacting the first half. Firstly, the vast majority of the GBP8m
costs remaining from the recall of Fruit Shoot from last year.
Secondly, although A&P as a % of revenue is expected to be 25
basis points higher for the full year, there was a reduction of 180
basis points in the first half reflecting the phasing of our
marketing programmes this year compared to the previous one.
Excluding these items, Britvic's underlying EBITA was up 17.9%
demonstrating a substantial improvement in the performance of the
business
We have focused on improving free cash flow generation and
reducing the level of debt in the group. This continued focus has
led to an improvement in free cash flow of 48.2% versus the prior
year, leading to a further reduction in debt of 5.7%.
The first half incorporates 28 weeks of fixed costs but
represents less than half of our expected revenue and is a working
capital high point for the business ahead of the summer months.
GB Stills 28 weeks ended 28 weeks ended % change
14 April 2013 15 April 2012 Actual Exchange
GBPm GBPm Rate
--------------- --------------- -----------------
Volume (millions litres) 192.9 211.4 (8.8)
ARP per litre 84.9p 79.8p 6.4
Revenue 163.7 168.8 (3.0)
Brand contribution 81.4 74.2 9.7
Brand contribution margin 49.7% 44.0% 570 bps
The Fruit Shoot return to market programme remains on track but
has impacted the first half performance with supply only returning
back to historical levels in January 2013. Robinsons continued its
positive momentum of recent quarters, growing its share again
versus last year. The contribution of increasing double concentrate
sales accounted for about half of the growth of reported ARP.
During the second quarter the stills segment has been impacted
by poor weather that has reduced consumption occasions, especially
in the pub and club channel where J(2) O and Fruit Shoot have a
strong presence.
Brand contribution margin was up by 570 basis points in the
period with underlying growth of 350 basis points when we adjust
for the year on year phasing impact of our marketing programmes.
The growth in underlying margin was due to a combination of our
focussed growth in ARP, a lower raw material cost inflation and the
product value optimisation benefits from initiatives that we
carried out last year on J(2) O and Fruit Shoot.
GB Carbonates % change
28 weeks ended 28 weeks ended Actual Exchange
14 April 2013 15 April 2012 Rate
GBPm GBPm
----------------- ----------------- -----------------
Volume (millions litres) 580.9 595.0 (2.4)
ARP per litre 45.9p 44.1p 4.1
Revenue 266.6 262.1 1.7
Brand contribution 100.2 91.1 10.0
Brand contribution margin 37.6% 34.8% 280 bps
We delivered a further strong revenue performance from our GB
carbonates brands, with revenue up 1.7% following a prior year
comparative of 6.7%. Following a strong Q1 carbonates performance
in which we grew both volume and price with revenue up 9.2%, Q2 has
seen a more promotionally competitive carbonates market. Our
strategy to focus on market value share and drive margin was
successfully implemented and resulted in ARP growth of 4.1% leading
to both revenue and impressive margin growth.
Our carbonates marketing programme was intentionally lighter in
the first half of this year compared to last year, reflected in the
brand contribution margin being up by 280 basis points in the
period. Adjusting for this timing benefit, the underlying
improvement was around 170 basis points.
International 28 weeks ended 28 weeks ended % change
14 April 2013 15 April 2012 Actual Exchange
GBPm GBPm Rate
--------------- --------------- -----------------
Volume (millions litres) 18.6 19.2 (3.1)
ARP per litre 96.8p 75.0p 29.1
Revenue 18.0 14.4 25.0
Brand contribution 6.9 3.7 86.5
Brand contribution margin 38.3% 25.7% 1,260bps
International enjoyed a strong first half performance with
revenue up 25.0%, compared to growth of 10.8% last year. Following
the growth in Q1 which was driven by the reintroduction of Fruit
Shoot to the Netherlands and Belgium we have seen further strong
growth from our emerging US franchise business during Q2.
The volume reduction reflects the US Fruit Shoot business
transitioning to a concentrate model whereas in the first half of
last year we were still exporting finished product from the UK.
Furthermore we chose to raise prices in some non-strategic, high
volume, low margin areas of our export business. This resulted in a
reduction of volume in the period and is likely to affect the
volumes for the full year, albeit with minimal impact to
profits.
We are on track to complete the previously announced roll-out of
Fruit Shoot to 30 US states by the summer of 2013 and we have more
than doubled the number of distribution outlets to over 41,000 in
the past three months. We have achieved listings in key retailers
such as Hess, Dollar, and Walmart as a result of our broader
geographic coverage and strong sales proposition. Today, we have
also announced that we have reached agreement with a new partner in
the US, Pepsi Cola Bottling Company of Pittsburgh, to distribute
Fruit Shoot in the states of Kansas and Missouri. This increases
our distribution to a total of 32 US states.
Brand contribution and margin have shown significant growth,
reflecting the growing contribution of the concentrate model to the
business unit and the strong margin orientated trading focus that
the export management team has adopted.
Ireland 28 weeks ended 28 weeks ended % change % change Constant
14 April 2013 15 April 2012 Actual Exchange Exchange Rate
GBPm GBPm Rate
--------------- --------------- ----------------- ------------------
Volume (millions
litres) 98.7 104.5 (5.6) (5.6)
ARP per litre 55.7p 54.4p 2.4 4.7
Revenue 67.2 72.7 (7.6) (5.5)
Brand contribution 24.2 22.1 9.5 12.0
Brand contribution
margin 36.0% 30.4% 560bps 560bps
Note: Volumes and ARP include own-brand soft drinks sales and do
not include factored product sales included within total revenue
and brand contribution.
The Irish market remains challenging; however our own brands
continued the recent quarter's improved performance by
outperforming the market again. Whilst our overall volumes declined
5.6% we successfully grew value share and held volume share in the
take-home market as measured by Nielsen. This was as a result of
the execution of a disciplined promotional strategy which grew ARP
by 4.7%.
Factored brands, which we sell through our wholesaling business
continued to account for the majority of the revenue decline.
The improved brand contribution was a result of the robust ARP
growth and the financial benefits of the on-going cost saving
programme we announced last year. The underlying brand contribution
margin, net of timing differences on A&P, was 310 basis points
higher this year.
France 28 weeks ended 28 weeks ended % change % change Constant
14 April 2013 15 April 2012 Actual Exchange Exchange Rate
GBPm GBPm Rate
--------------- --------------- ----------------- ------------------
Volume (millions
litres) 136.7 142.3 (3.9) (3.9)
ARP per litre 90.5p 86.5p 4.6 7.0
Revenue 123.7 123.1 0.5 2.7
Brand contribution 28.9 27.1 6.6 9.1
Brand contribution
margin 23.4% 22.0% 140bps 140bps
In France volume was down 3.9% in the first half whilst revenues
grew 2.7% and brand contribution increased by 9.1%, driven by
continued strong pricing growth. We outperformed the take-home soft
drinks market in France, as measured by IRI, which grew value by
1.1%.
In syrups we outgrew the take-home market, taking value market
share with both the Teisseire and Moulin de Valdonne brands.
Teisseire Fruit Shoot grew strongly, building distribution beyond
pre-recall levels and in Q2 the brand grew sales at more than twice
the rate of the previous year. Growth of Teisseire Fruit Shoot was
also driven by increasing rate of sale on the brand, led by the new
multivitamin variant that we launched last year. Building on the
success of Teisseire Fruit Shoot we extended the brand franchise
into syrups with the launch of Fruit Shoot Syrups during late
Q2.
Fixed Costs 28 weeks ended 28 weeks ended % change
14 April 2013 15 April 2012 Actual
GBPm GBPm Exchange
Rate
--------------- --------------- ----------
Non-brand A&P (4.3) (5.2) 17.3
Fixed supply chain (59.6) (59.5) (0.2)
Selling costs (64.5) (63.3) (1.9)
Overheads and other (61.2) (49.8) (22.9)
Total (189.6) (177.8) (6.6)
------------------------ --------------- --------------- ----------
Total A&P investment (22.0) (33.0) 33.3
A&P as a % of revenue* 3.5% 5.3% 180 bps
* excludes 3(rd) Party Revenue
Fixed costs include the majority of the GBP8m remaining costs
associated with the recall of Fruit Shoot and the cost of the
expanded in-market team supporting our US Fruit Shoot business
communicated last year.
The reduction in total A&P as a percentage of revenue of
180bps versus the prior year was due to the timing of our marketing
programmes. Our 2013 summer marketing programme is substantially
increased on the previous year and as a result our full year
guidance has been increased to be ahead of last year by an
estimated 25 basis point of the expected full year revenue.
Exceptional and Other Items
In the period Britvic has accounted for a net charge of GBP4.7m
of pre-tax (GBP3.8m post tax) exceptional and other costs. These
include:
-- Corporate exceptional items of GBP8.1m cost, mainly relating
to advisory fees regarding the potential merger with A.G. Barr.
-- Other fair value movements gain of GBP3.4m. Within
exceptional and other items we include the fair value movement of
financial instruments where hedge accounting cannot be applied.
This is made up of two items, a number of share swaps to satisfy
our employee incentive share schemes and interest-rate swaps.
Interest
The net finance charge before exceptional and other items for
the 28 week period for the group was GBP14.5m compared with
GBP15.6m in the same period in the prior year reflecting the lower
debt profile of the group and the continued low interest rate
environment.
Taxation
The tax charge before exceptional items is GBP9.0m which equates
to an effective tax rate of 24.0% (28 weeks ended 15 April 2012:
24.6% and 52 weeks ending 30 September 2012: 25.5%).
The tax rate before exceptional items, as indicated by the
interim financial statements, does not include the impact of the
proposed reduction in the UK Corporation Tax rate to 21% from 1
April 2014 and to 20% from 1 April 2015 as these rate changes were
not substantively enacted prior to the interim balance sheet
date.
Earnings Per Share
Adjusted basic EPS for the period, excluding exceptional and
other items and acquisition related amortisation, is 12.4p, up
47.6% on the same period last year of 8.4p.
Basic EPS (after exceptional and other items of GBP3.8m charge
post-tax) for the period was 10.2p compared with the 7.7p for the
same period last year (after exceptional and other items charge of
GBPnil post-tax).
Dividends
The board is recommending an interim dividend of 5.4p per share
an increase of 1.9% on the dividend paid last year, with a total
value of GBP12.9m. The interim dividend will be paid on 12 July
2013 to shareholders on record as at 31 May 2013. The ex-dividend
date is 29 May 2013.
Cash Flow and Net Debt
Underlying free cash flow was a GBP24.4m outflow, a 48.2%
improvement compared to a GBP47.1m outflow the previous year.
Our first half always generates a cash outflow reflecting the
working capital high. The improvement is driven by the growth in
profitability, the benefit of the pension funding partnership shown
in other costs more than offsetting the increased pension
contribution payment increase. Additionally there was no
requirement this year to satisfy employee reward schemes with share
purchases.
The adjusted net debt (taking into account the foreign exchange
movements on the derivatives hedging our US Private Placement debt)
at 14 April 2013 is GBP503.7m.
Treasury Management
The financial risks faced by the group are identified and
managed by a central treasury department, whose activities are
carried out in accordance with board approved policies and subject
to regular audit and Treasury Committee reviews. The department
does not operate as a profit centre and no transaction is entered
into for trading or speculative purposes.
Key financial risks managed by the treasury department include
exposures to movements in interest rates and foreign exchange
whilst managing the group's debt and liquidity, currency risk,
interest rate risk and cash management. The group uses financial
instruments to hedge against interest rate and foreign currency
exposures.
The group has GBP891m of committed debt facilities consisting of
a GBP400m bank facility which matures in 2016 and a series of
private placement notes with maturities between 2014 and 2022;
providing the business with a secure funding platform.
At 14 April 2013, the group's unadjusted net debt of GBP593.9m
(excluding derivative hedges) consisted of GBP13.0m drawn under the
group's committed bank facilities, GBP581.4m of private placement
notes, GBP4.9m of accrued interest and GBP0.7m of finance leases,
offset by net cash and cash equivalents of GBP2.9m and unamortised
loan issue costs of GBP3.2m.
After taking into account the element of the fair value of
interest rate currency swaps hedging the balance sheet value of the
private placement notes, the group's adjusted net debt is
GBP503.7m.
Pensions
At 14 April 2013, the IAS 19 pension net deficit in respect of
the group defined benefit pension schemes was GBP40.2m (30
September 2012: net deficit of GBP3.7m). The increase in the
overall deficit is driven primarily by changes to the underlying
market conditions on which the valuation assumptions are based for
the GB plan, including the increase in the RPI from 2.90% at the 30
September 2012 to 3.65% at 14 April 2013 and increase in CPI from
2.10% to 2.65% over the same period.
On retirement as CEO on 28 February 2013, Paul Moody, chose to
receive the BETUS portion of his benefits through the payment of a
cash lump sum in April 2013. As a result of this, a GBP0.5m profit
has been recognised in exceptional and other items in the income
statement for the period.
Business Resources
The main resources the group uses to achieve its results
are:
-- An extensive portfolio of stills and carbonates brands,
including Robinsons, Pepsi, 7UP, Tango, J(2) O and Fruit Shoot. The
breadth and depth of Britvic's portfolio enables it to target
consumer demand across a wide range of consumption occasions, in
all the major soft drinks categories and across all relevant routes
to market. Britvic Ireland owns a number of leading brands in the
Republic of Ireland and Northern Ireland, including Club,
Ballygowan and MiWadi as well as the rights to the Pepsi, 7UP and
Mountain Dew brands. In France the portfolio includes the leading
syrup brand Teisseire as well as Moulin de Valdonne, Pressade and
Fruit Shoot.
-- A successful long-standing relationship with PepsiCo that
resulted in the exclusive bottling agreement (EBA) being renewed in
GB in 2003 for a further 15 years, with an extension to 2023 on
admission to the London Stock Exchange. The EBA for Ireland lasts
until 2015. This relationship gives Britvic the exclusive right to
distribute the Pepsi and 7UP brands in GB and Ireland, access to
all new carbonated drinks developed by PepsiCo for distribution in
GB and Ireland and, to support the development of its carbonates
offering, access to PepsiCo's consumer and customer insight,
competitor intelligence, marketing best practice, brand and product
development expertise and technological know-how. Britvic has added
to its portfolio with Mountain Dew Energy in GB and Ireland and has
also been appointed in recent years as the exclusive GB bottler of
Gatorade, Lipton Ice Tea and SoBe.
-- A strong customer base. For example, in the GB take-home
market, Britvic's customers include the "Big 4" supermarkets
(Tesco, J Sainsbury's, Asda and Wm Morrisons) together with a
number of other important grocery retailers. The group has
significant supply arrangements with a number of key players in the
GB pubs and clubs sector and leisure and catering channels. Through
Britvic International, the group has built on the success of the
Robinsons and Fruit Shoot brands by introducing these products into
markets outside GB.
-- Britvic also has a well-invested and flexible group
production capability and distribution network that enables its
soft drinks to be made available to consumers across all of its
operating territories.
Risks and Uncertainties
Risk Management Process
Britvic's risk management process has been adapted to support
its growth strategy, focusing on growing the business through both
acquisition and organic growth opportunities. Risk is an inherent
part of doing business. The intention of the risk management
process is not to avoid all risk as success comes from managing
risk through the assessment of the balance of risk versus reward
set against Britvic's risk appetite. The system of internal
controls and risk management used to identify and manage the
principal risks the group faces is described in the Corporate
Governance Report. In assessing risk both the financial and
reputational impact are considered, as Britvic is a brand-led
business. The principal risks and corresponding mitigation set out
below represent the principal uncertainties that may impact on our
ability to effectively deliver our strategy in the future (note -
this is not intended to be a complete list of all of the risks that
could impact Britvic, there may be other risks, that should they
materialise, could have a material impact on the group).
(A) Risks Relating To The Group
1. An over-reliance on any specific customer or brand.
Risk - A major retailer, in the take-home or pubs and clubs
channel, may decide to remove our products from its range and stock
alternative products instead.
Mitigation - Britvic sells its products through a wide-range of
channels and retailers. This broad mix of customers reduces our
dependency on any one of these relationships. Likewise our
portfolio and innovation launches further diversify our range
thereby reducing the dependency on any one brand.
2. A termination or variation of the bottling and distribution
arrangements with PepsiCo or an adverse development in the PepsiCo
relationship.
Risk - At the end of the bottling agreements or earlier in
specific circumstances PepsiCo may terminate our right to sell
their brands.
Mitigation - Britvic reduces this risk in two ways. Firstly, the
majority of its revenues are generated by its wholly-owned brands.
Its brand marketing focus and innovation pipeline are balanced
between its wholly-owned brands and the PepsiCo franchised brands.
Secondly, Britvic places significant emphasis on developing its
relationship with PepsiCo through both extending bottling
agreements and maintaining an appropriate level of communication
between the two businesses to deal with on-going operational
issues.
3. Inability to protect the intellectual property rights
associated with its current and future brands.
Risk - Failure to maintain these rights could result in the
value of our brands being eroded by copycat products.
Mitigation - Through our legal team we proactively look to
protect these rights by registering the relevant trademarks and
enforcing these in court when a resolution cannot be reached with
other parties.
4. Increase in the group's funding needs or obligations in respect of its pension scheme.
Risk - The required revaluations of the pension schemes may
highlight a worsening deficit position that requires the company to
provide additional cash contributions to meet future needs.
Mitigation - The group pensions function works closely with the
pension Trustees to ensure an appropriate portfolio is in place to
fund pension requirements and spread risk as best as possible. New
employees of the company are enrolled into a defined contribution
scheme that limits future liabilities. The largest of Britvic's
defined benefit schemes, for GB employees, was closed to future
accrual in April 2011 (closed to new members in 2002). This scheme
is now partially funded by a Pension Funding Partnership and
funding requirements have been agreed to 2017.
5. Inadequate IT disaster recovery plans.
Risk - As Britvic has grown, both through acquisition and
organically, so has its reliance on IT systems to function, a
failure of which could halt production or the ability to deliver
goods.
Mitigation - Britvic has out-sourced the management of its data
centre to a professional provider with both robust disaster
recovery and business continuity plans capable of meeting both its
current and future needs.
6. Contaminated or faulty products.
Risk - A faulty or contaminated product is supplied to the
market.
Mitigation - Britvic has robust quality control measures and
processes in place to maintain the high quality of its products
supplied at all times. These have been further strengthened in
response to the Fruit Shoot recall required during 2012.
7. Loss of use of a key manufacturing or distribution site.
Risk - A severe event leads to the loss of use of a key
site.
Mitigation - Britvic seeks to maintain multiple sources of
supply for its products, wherever possible.
(B) Risks Relating To The Market
1. The macro-economic environment.
Risk - Continued economic downturn, government regulatory
changes and uncertainty in the economy impacts consumer confidence
resulting in reduced spend on soft drinks. In addition, wider
economic factors could have an impact on Britvic, including
increasing counterparty credit risk and currency fluctuations.
Mitigation - The soft drinks category is reasonably resilient
and Britvic offers a range of everyday value products to meet the
consumer need for reduced spending. Britvic monitors consumer
spending trends and develops products designed to meet the spending
requirements of its consumers. Britvic closely monitors and manages
its exposure to wider economic factors to the extent that it is
possible or beneficial to do so, including through hedging.
2. Increasing commodity prices.
Risk - Prices for commodities used in the production of our
products may fluctuate widely and have increased significantly over
the last year mainly due to poor crops and scarcity. Therefore, the
risk is two-fold, one of not being able to source enough, and one
of having to pay more than expected.
Mitigation - Britvic sources much of its planned requirements
through forward contracts and hedging arrangements and is
developing new sources of supply. Through this process it aims to
minimise the impact of price fluctuations.
3. A change in consumer preferences and spending on soft drinks.
Risk - Consumers may decide to switch away from Britvic products
or spend less on soft drinks.
Mitigation - By offering a range of everyday value to premium
products across a range of sub-categories, Britvic is not dependant
on any single brand. The range has been developed to offer
consumers choice in terms of flavour, cost and formulation. Britvic
closely monitors consumer trends in order to anticipate changes in
preferences and match its offerings to these trends.
4. Potential impact of regulatory developments.
Risk - Legislation may impact our ability to market or sell
certain products or engage with specific consumers.
Mitigation - Britvic proactively engages with the relevant
authorities both directly and through a number of trade
organisations to ensure it can fully participate in the future
development of legislation. Britvic seeks to develop its existing
product portfolio and new products in anticipation of likely
regulatory requirements.
5. Potential impact of taxation changes.
Risk - Potential legislation to introduce a tax on manufacturers
of soft drinks.
Mitigation - Britvic will look to remain commercially
competitive whilst seeking to offset as much of the cost as
possible through increasing prices to customers.
6. Increasing energy costs.
Risk - Energy costs fluctuation results in unforeseen increases
in costs.
Mitigation - Britvic has contracts for some of its energy supply
with pre-agreed prices, and price increase mechanisms in line with
market, partially mitigating this risk. In addition, Britvic has
taken steps to improve its energy efficiency to reduce its energy
requirements.
7. Changes in competitor behaviour or a new entrant.
Risk - A significant change in the competitor landscape from a
new or existing competitor may impact on the demand for Britvic
products.
Mitigation - Britvic maintains a strong programme of activity to
maintain and grow demand for its products.
BRITVIC PLC
INTERIM FINANCIAL STATEMENTS
For the 28 weeKS ENDED 14 april 2013
Company number: 5604923
RESPONSIBILITY AND CAUTIONARY STATEMENTS
RESPONSIBILITY STATEMENTS
The directors confirm that to the best of their knowledge, this
unaudited condensed set of consolidated interim financial
statements has been prepared in accordance with IAS 34 'Interim
Financial Reporting' as adopted by the European Union, and that the
interim management report herein includes a fair review of the
information required by DTR 4.2.7R and DTR 4.2.8R.
CAUTIONARY STATEMENT
This report is addressed to the shareholders of Britvic plc and
has been prepared solely to provide information to them.
This report is intended to inform the shareholders of the
group's performance during the 28 weeks to 14 April 2013. This
report contains forward looking statements based on knowledge and
information available to the directors at the date the report was
prepared. These statements should be treated with caution due to
the inherent uncertainties underlying any such forward looking
information and any statements about the future outlook may be
influenced by factors that could cause actual outcomes and results
to be materially different.
DIRECTORS
The directors of Britvic plc are:
Gerald Corbett
Paul Moody (resigned 26 February 2013)
Simon Litherland (appointed 13 February 2013)
John Gibney
Joanne Averiss
Ben Gordon
Bob Ivell
Michael Shallow
By order of the Board
Simon Litherland
Chief Executive
John Gibney
Finance Director
BRITVIC PLC
INDEPENDENT REVIEW REPORT TO BRITVIC PLC
Introduction
We have been engaged by Britvic plc (the 'company') to review
the condensed set of financial statements in the interim results
for the 28 weeks ended 14 April 2013 which comprises the
consolidated income statement, consolidated statement of
comprehensive income, consolidated balance sheet, consolidated
statement of cash flows, consolidated statement of changes in
equity and the related notes 1 to 16. We have read the other
information contained in the interim results and considered whether
it contains any apparent misstatements or material inconsistencies
with the information in the condensed set of financial
statements.
This report is made solely to the company in accordance with
guidance contained in International Standard on Review Engagements
2410 (UK and Ireland) "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the
Auditing Practices Board. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company, for our work, for this report, or for the conclusions we
have formed.
Directors' Responsibilities
The interim results are the responsibility of, and have been
approved by, the directors. The directors are responsible for
preparing the interim results in accordance with the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct
Authority.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this interim financial report has been prepared in accordance
with International Accounting Standard 34, "Interim Financial
Reporting", as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the interim results
based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the interim results for the 28 week period ended 14 April 2013
is not prepared, in all material respects, in accordance with
International Accounting Standard 34 as adopted by the European
Union and the Disclosure and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Ernst & Young LLP
Birmingham
21 May 2013
BRITVIC PLC
consolidated income statement
For the 28 weeks ended 14 April 2013
(Unaudited) (Unaudited) (Audited)
28 Weeks 28 Weeks 52 Weeks
Ended 30 September
Ended 14 April 2013 Ended 15 April 2012 2012
------------------------------------ ------------------------------------ ------------------------------------
Before Before
exceptional Exceptional Before Exceptional exceptional Exceptional
and and exceptional and and and
other other and other other other other
items items* Total items items* Total items items* Total
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------ -------- ------------
Revenue 639.2 - 639.2 641.1 - 641.1 1,256.4 - 1,256.4
Cost of sales (311.7) - (311.7) (324.9) - (324.9) (624.6) - (624.6)
---------------- ----- ------------ ------------ -------- ------------ ------------ -------- ------------ ------------ --------
Gross profit 327.5 - 327.5 316.2 - 316.2 631.8 - 631.8
Selling and
distribution
costs (192.3) - (192.3) (192.6) - (192.6) (353.3) - (353.3)
Administration
expenses (83.2) (4.8) (88.0) (83.2) 0.4 (82.8) (165.8) (4.8) (170.6)
---------------- ----- ------------ ------------ -------- ------------ ------------ -------- ------------ ------------ --------
Operating
profit/(loss) 52.0 (4.8) 47.2 40.4 0.4 40.8 112.7 (4.8) 107.9
Finance costs (14.5) 0.1 (14.4) (15.6) (1.1) (16.7) (28.3) (2.1) (30.4)
---------------- ----- ------------ ------------ -------- ------------ ------------ -------- ------------ ------------ --------
Profit/(loss)
before tax 37.5 (4.7) 32.8 24.8 (0.7) 24.1 84.4 (6.9) 77.5
Taxation 7 (9.0) 0.9 (8.1) (6.1) 0.7 (5.4) (21.5) 1.4 (20.1)
---------------- ----- ------------ ------------ -------- ------------ ------------ -------- ------------ ------------ --------
Profit/(loss)
for the period
attributable
to the equity
shareholders 28.5 (3.8) 24.7 18.7 - 18.7 62.9 (5.5) 57.4
---------------- ----- ------------ ------------ -------- ------------ ------------ -------- ------------ ------------ --------
Earnings per
share
Basic earnings
per share 8 10.2p 7.7p 23.8p
------------ ------------ -------- ------------ ------------ -------- ------------ ------------ --------
Diluted
earnings
per share 8 10.1p 7.3p 22.4p
------------ ------------ -------- ------------ ------------ -------- ------------ ------------ --------
Adjusted basic
earnings per
share** 8 12.4p 8.4p 27.2p
------------ ------------ -------- ------------ ------------ -------- ------------ ------------ --------
Adjusted
diluted
earnings per
share** 8 12.2p 8.1p 26.5p
------------ ------------ -------- ------------ ------------ -------- ------------ ------------ --------
* See note 6.
** Adjusted basic and diluted earnings per share measures have been adjusted
by adding back exceptional and other items (see note 6) and amortisation
of acquisition related intangible assets. This reconciliation is shown
in note 8.
All activities relate to continuing operations.
BRITVIC PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the 28 weeks ended 14 April 2013
(Unaudited) (Unaudited) (Audited)
28 Weeks 28 Weeks 52 Weeks
Ended Ended Ended
14 April 15 April 30 September
2013 2012 2012
Note GBPm GBPm GBPm
---------------------------------------------------- ----- ------------ ------------ -------------
Profit for the period attributable to
the equity shareholders 24.7 18.7 57.4
Actuarial (losses)/gains on defined benefit
pension schemes (52.4) (4.1) 9.2
Deferred tax on actuarial (losses)/gains
on defined benefit pension schemes 9.6 (20.3) (7.9)
Current tax on additional pension contributions 2.4 21.1 4.6
Gains/(losses) in the period in respect
of cash flow hedges 13 19.3 (11.3) (17.0)
Amounts recycled to the income statement
in respect of cash flow hedges 13 (16.9) 5.7 9.5
Deferred tax in respect of cash flow hedges
accounted for in the hedging reserve (0.6) (1.1) 2.1
Exchange differences on translation of
foreign operations 13 3.9 (3.9) (3.9)
Tax on exchange differences accounted
for in the translation reserve (0.7) 2.5 4.0
Other comprehensive income for the period
net of tax (35.4) (11.4) 0.6
Total comprehensive income for the period
attributable to the equity shareholders (10.7) 7.3 58.0
---------------------------------------------------- ----- ------------ ------------ -------------
BRITVIC PLC
CONSOLIDATED BALANCE SHEET
As at 14 April 2013
(Unaudited) (Unaudited) (Audited)
15 April 2012 30 September
14 April 2013 2012
Note GBPm GBPm GBPm
---------------------------------- ----- ---------------- ---------------- ---------------
Assets
Non-current assets
Property, plant and equipment 9 232.6 236.8 236.6
Intangible assets 9 318.7 316.2 305.2
Other receivables 4.6 5.0 3.6
Other financial assets 13 88.3 90.6 92.1
Pension asset - - 7.5
---------------------------------- ----- ---------------- ---------------- ---------------
644.2 648.6 645.0
---------------------------------- ----- ---------------- ---------------- ---------------
Current assets
Inventories 86.2 90.3 73.8
Trade and other receivables 294.3 282.0 257.4
Current income tax receivable - 13.3 -
Other financial assets 13 16.5 0.8 0.1
Cash and cash equivalents 7.4 2.9 49.5
404.4 389.3 380.8
---------------------------------- ----- ---------------- ---------------- ---------------
Non-current assets held - 0.4 -
for sale
---------------------------------- ----- ---------------- ---------------- ---------------
Total assets 1,048.6 1,038.3 1,025.8
---------------------------------- ----- ---------------- ---------------- ---------------
Current liabilities
Trade and other payables (361.7) (356.9) (357.2)
Bank overdrafts (4.5) (8.8) (1.9)
Interest-bearing loans
and borrowings 10 (92.1) - (0.6)
Other financial liabilities 13 (1.7) (4.3) (4.4)
Current income tax payable (8.5) - (7.8)
(468.5) (370.0) (371.9)
Non-current liabilities
Interest-bearing loans
and borrowings 10 (504.7) (600.4) (558.7)
Deferred tax liabilities (26.1) (42.5) (34.1)
Pension liability 14 (40.2) (16.7) (11.2)
Other financial liabilities 13 (6.6) (7.7) (10.9)
Other non-current liabilities (1.9) (1.9) (1.9)
---------------------------------- ----- ---------------- ---------------- ---------------
(579.5) (669.2) (616.8)
---------------------------------- ----- ---------------- ---------------- ---------------
Total liabilities (1,048.0) (1,039.2) (988.7)
---------------------------------- ----- ---------------- ---------------- ---------------
Net assets/(liabilities) 0.6 (0.9) 37.1
---------------------------------- ----- ---------------- ---------------- ---------------
Capital and reserves
Issued share capital 11 48.7 48.4 48.5
Share premium account 20.9 16.8 17.7
Own shares reserve (1.9) (1.1) (0.8)
Share scheme reserve 5.9 7.0 4.2
Hedging reserve 5.4 2.3 3.6
Translation reserve 25.7 21.0 22.5
Merger reserve 87.3 87.3 87.3
Retained losses (191.4) (182.6) (145.9)
---------------------------------- ----- ---------------- ---------------- ---------------
Total equity 0.6 (0.9) 37.1
---------------------------------- ----- ---------------- ---------------- ---------------
BRITVIC PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
For the 28 weeks ended 14 April 2013
(Unaudited) (Unaudited) (Audited)
28 Weeks 52 Weeks
Ended 28 Weeks Ended Ended
14 April 30 September
2013 15 April 2012 2012
Note GBPm GBPm GBPm
--------------------------------------- ----- ------------ ---------------- --------------
Cash flows from operating activities
Profit before tax 32.8 24.1 77.5
Finance costs 14.4 16.7 30.4
Other financial instruments (3.3) (2.4) (1.4)
Impairment of property, plant
and equipment and intangible
assets 6, 9 - 14.2 14.9
Depreciation 18.4 17.8 34.4
Amortisation 5.1 5.0 9.5
Share-based payments 2.5 3.5 3.0
Net pension charge less contributions (16.4) (32.1) (31.1)
(Increase)/decrease in inventory (9.5) (3.8) 10.9
(Increase)/decrease in trade
and other receivables (32.2) (33.4) (2.0)
(Decrease)/increase in trade
and other payables (6.2) (8.6) (2.8)
Loss on disposal of tangible
and intangible assets 1.9 0.5 1.5
Income tax paid (5.2) (11.3) (12.5)
--------------------------------------- ----- ------------ ---------------- --------------
Net cash flows from operating
activities 2.3 (9.8) 132.3
--------------------------------------- ----- ------------ ---------------- --------------
Cash flows from investing activities
Proceeds from sale of property,
plant and equipment 0.1 1.4 2.2
Purchase of property, plant
and equipment (15.1) (19.1) (43.9)
Purchase of intangible assets (2.0) (3.0) (5.4)
Net cash flows used in investing
activities (17.0) (20.7) (47.1)
--------------------------------------- ----- ------------ ---------------- --------------
Cash flows from financing activities
Finance costs - (0.1) (0.1)
Interest paid (13.8) (14.8) (28.5)
Interest-bearing loans drawn
down/(repaid) 10 11.2 34.8 (1.0)
Issue of shares 2.1 1.2 2.0
Purchase of own shares - (9.3) (9.3)
Dividends paid to equity shareholders 12 (29.6) (29.9) (42.5)
Net cash flows used in financing
activities (30.1) (18.1) (79.4)
--------------------------------------- ----- ------------ ---------------- --------------
Net (decrease)/increase in
cash and cash equivalents (44.8) (48.6) 5.8
Cash and cash equivalents at
beginning of period 47.6 43.0 43.0
Exchange rate differences 0.1 (0.3) (1.2)
--------------------------------------- ----- ------------ ---------------- --------------
Cash and cash equivalents at
the end of the period 2.9 (5.9) 47.6
--------------------------------------- ----- ------------ ---------------- --------------
By balance sheet category:
Cash and cash equivalents 7.4 2.9 49.5
Bank overdrafts (4.5) (8.8) (1.9)
--------------------------------------- ----- ------------ ---------------- --------------
2.9 (5.9) 47.6
--------------------------------------- ----- ------------ ---------------- --------------
BRITVIC PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the 28 weeks ended 14 April 2013
Issued Share Own Share
share premium shares scheme Hedging Translation Merger Retained
capital account reserve reserve reserve reserve reserve losses Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 30 September
2012
(audited) 48.5 17.7 (0.8) 4.2 3.6 22.5 87.3 (145.9) 37.1
Profit for the
period - - - - - - - 24.7 24.7
Other
comprehensive
income - - - - 1.8 3.2 - (40.4) (35.4)
----------------- -------- -------- -------- ----------- ---------- --------------- ----------- ----------- -------
Total
comprehensive
income - - - - 1.8 3.2 - (15.7) (10.7)
----------------- -------- -------- -------- ----------- ---------- --------------- ----------- ----------- -------
Issue of shares 0.2 3.2 (2.1) - - - - - 1.3
Own shares
utilised
for share
schemes - - 1.0 (0.7) - - - 0.4 0.7
Movement in
share-based
schemes - - - 2.4 - - - - 2.4
Deferred tax
on share-based
payments - - - - - - - (0.6) (0.6)
Payment of
dividend - - - - - - - (29.6) (29.6)
At 14 April 2013
(unaudited) 48.7 20.9 (1.9) 5.9 5.4 25.7 87.3 (191.4) 0.6
----------------- -------- -------- -------- ----------- ---------- --------------- ----------- ----------- -------
Issued Share Own Share
share premium shares scheme Hedging Translation Merger Retained
capital account reserve reserve reserve reserve reserve losses Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 2 October
2011
(audited) 48.3 15.0 (1.0) 7.8 9.0 22.4 87.3 (166.3) 22.5
Profit for the
period - - - - - - - 18.7 18.7
Other
comprehensive
income - - - - (6.7) (1.4) - (3.3) (11.4)
--------------- -------- -------- -------- ----------- ---------- --------------- ----------- ----------- -------
Total
comprehensive
income - - - - (6.7) (1.4) - 15.4 7.3
--------------- -------- -------- -------- ----------- ---------- --------------- ----------- ----------- -------
Issue of
shares 0.1 1.8 (1.6) - - - - - 0.3
Own shares
purchased
for share
schemes - - (6.6) - - - - - (6.6)
Own shares
utilised
for share
schemes - - 8.1 (4.3) - - - (3.1) 0.7
Movement in
share-based
schemes - - - 3.5 - - - - 3.5
Current tax on
share-based
payments - - - - - - - 0.7 0.7
Deferred tax
on
share-based
payments - - - - - - - 0.6 0.6
Payment of
dividend - - - - - - - (29.9) (29.9)
At 15 April
2012
(unaudited) 48.4 16.8 (1.1) 7.0 2.3 21.0 87.3 (182.6) (0.9)
--------------- -------- -------- -------- ----------- ---------- --------------- ----------- ----------- -------
BRITVIC PLC
notes to the financial information
For the 28 weeks ended 14 April 2013
1. General Information
Britvic plc (the 'company', the 'group') is a public limited
company, incorporated and domiciled in the United Kingdom. The
address of the registered office is: Britvic plc, Breakspear Park,
Breakspear Way, Hemel Hempstead, Hertfordshire, HP2 4TZ.
The company is listed on the London Stock Exchange.
These interim financial statements do not constitute statutory
accounts as defined by Section 434 of the Companies Act 2006. They
have been reviewed but not audited by the group's auditor. The
statutory accounts for Britvic plc for the 52 weeks ended 30
September 2012, which were prepared under International Financial
Reporting Standards (IFRS) as adopted by the European Union, have
been delivered to the Registrar of Companies. The auditor's opinion
on those accounts was unqualified and did not contain a statement
made under section 498 (2) or (3) of the Companies Act 2006.
The interim financial statements were authorised for issue by
the board of directors on 21 May 2013.
2. Basis of preparation
These interim financial statements comprise the consolidated
balance sheet as at 14 April 2013 and related consolidated income
statement, consolidated statement of cash flows, consolidated
statement of comprehensive income, consolidated statement of
changes in equity and the related notes 1 to 16 for the 28 weeks
then ended of Britvic plc ('financial information'). This financial
information has been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Services Authority and with the
International Accounting Standard (IAS) 34 'Interim Financial
Reporting' as adopted by the European Union.
3. Accounting policies
This financial information has been prepared using the
accounting policies as set out in pages 50 - 56 of the group's 2012
Annual report.
During the period, the group adopted a number of interpretations
and amendments to standards which had an immaterial impact on the
consolidated financial statements of the group.
4. Seasonality of operations
Due to the seasonal nature of the business, higher revenues and
operating profits are usually expected in the second half of the
year than in the first 28 weeks.
5. Segmental reporting
For management purposes, the group is organised into business
units and has five reportable segments as follows:
-- GB Stills - United Kingdom excluding Northern Ireland
-- GB Carbs - United Kingdom excluding Northern Ireland
-- International
-- Ireland - including Northern Ireland
-- France
These business units sell soft drinks into their respective
markets.
Management monitors the operating results of its business units
separately for the purpose of making decisions about resource
allocation and performance assessment. Segment performance is
evaluated based on brand contribution. This is defined as revenue
less material costs and all other marginal costs that management
considers to be directly attributable to the sale of a given
product. Such costs include brand specific advertising and
promotion costs, raw materials and marginal production and
distribution costs. However, group financing (including finance
costs) and income taxes are managed on a group basis and are not
allocated to reportable segments.
Transfer prices between reportable segments are on an arm's
length basis in a manner similar to transactions with third
parties.
28 weeks ended 14
April 2013 GB Stills GB Carbs International Ireland France Adjustments Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Revenue
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
- External 163.7 266.6 18.0 67.2 123.7 - 639.2
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
- Inter-segment* 9.7 4.2 - 6.5 0.6 (21.0) -
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
173.4 270.8 18.0 73.7 124.3 (21.0) 639.2
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Brand contribution 81.4 100.2 6.9 24.2 28.9 - 241.6
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Non-brand advertising
& promotion ** (4.3)
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Fixed supply chain*** (59.6)
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Selling costs*** (64.5)
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Overheads and other
costs** (61.2)
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Operating profit
before exceptional
and other items 52.0
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Finance costs (14.5)
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Exceptional and other
items (4.7)
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Profit before tax 32.8
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
28 weeks ended 15
April 2012 GB Stills GB Carbs International Ireland France Adjustments Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Revenue
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
- External 168.8 262.1 14.4 72.7 123.1 - 641.1
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
- Inter-segment* 7.0 6.0 - 3.2 0.3 (16.5) -
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
175.8 268.1 14.4 75.9 123.4 (16.5) 641.1
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Brand contribution 74.2 91.1 3.7 22.1 27.1 - 218.2
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Non-brand advertising
& promotion ** (5.2)
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Fixed supply chain*** (59.5)
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Selling costs*** (63.3)
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Overheads and other
costs** (49.8)
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Operating profit
before exceptional
and other items 40.4
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Finance costs (15.6)
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Exceptional and other
items (0.7)
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
Profit before tax 24.1
----------------------- ---------- --------- -------------- -------- ------- ------------ -------
52 weeks ended 30
September 2012 GB Stills GB Carbs International Ireland France Adjustments Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------------- ---------- --------- -------------- -------- ------- ------------ --------
Revenue
----------------------- ---------- --------- -------------- -------- ------- ------------ --------
- External 321.7 517.9 29.3 138.7 248.8 - 1,256.4
----------------------- ---------- --------- -------------- -------- ------- ------------ --------
- Inter-segment* 15.0 9.6 - 8.0 0.8 (33.4) -
----------------------- ---------- --------- -------------- -------- ------- ------------ --------
336.7 527.5 29.3 146.7 249.6 (33.4) 1,256.4
----------------------- ---------- --------- -------------- -------- ------- ------------ --------
Brand contribution 141.2 188.7 8.3 44.6 59.2 - 442.0
----------------------- ---------- --------- -------------- -------- ------- ------------ --------
Non-brand advertising
& promotion ** (7.8)
----------------------- ---------- --------- -------------- -------- ------- ------------ --------
Fixed supply chain*** (100.3)
----------------------- ---------- --------- -------------- -------- ------- ------------ --------
Selling costs*** (118.0)
----------------------- ---------- --------- -------------- -------- ------- ------------ --------
Overheads and other
costs** (103.2)
----------------------- ---------- --------- -------------- -------- ------- ------------ --------
Operating profit
before exceptional
and other items 112.7
----------------------- ---------- --------- -------------- -------- ------- ------------ --------
Finance costs (28.3)
----------------------- ---------- --------- -------------- -------- ------- ------------ --------
Exceptional and other
items (6.9)
----------------------- ---------- --------- -------------- -------- ------- ------------ --------
Profit before tax 77.5
----------------------- ---------- --------- -------------- -------- ------- ------------ --------
* Inter-segment revenues are eliminated on consolidation.
** Included within 'Administration expenses' in the Consolidated
Income Statement. 'Overheads and other costs' relate to central
expenses including salaries, IT maintenance, depreciation and
amortisation.
*** Included within 'Selling and distribution costs' in the
Consolidated Income Statement.
6. Exceptional and other items
Exceptional and other items are those items of financial
performance that management believe should be separately disclosed
by virtue of the nature and infrequency of the events giving rise
to them to allow shareholders to better understand the elements of
financial performance in the period so as to facilitate comparison
with prior periods and to assess trends in financial performance
more readily.
Unless otherwise stated, exceptional and other items are
included within administration expenses in the consolidated income
statement.
28 Weeks 28 Weeks 52 Weeks
Ended Ended Ended
14 April 15 April 30 September
2013 2012 2012
Note GBPm GBPm GBPm
------------------------------- ------ --------- --------- -------------
Net pension gain (a) - 21.3 21.1
Asset impairments (b) - (14.2) (14.9)
Restructuring and advisory
costs (c) (8.1) (9.1) (11.0)
Property and relocation costs (d) - (1.1) (1.3)
Other fair value movements
* (e) 3.4 2.4 (0.8)
Total exceptional and other
items before tax (4.7) (0.7) (6.9)
--------------------------------------- --------- --------- -------------
* For the 28 weeks ended 14 April 2013, a GBP3.3m gain is
included within administration expenses (28 weeks ended 15 April
2012: GBP3.5m gain) and a GBP0.1m gain is included within finance
costs (28 weeks ended 15 April 2012: GBP1.1m loss) in the
consolidated income statement.
a) In 2012, the net pension gain related to an Ireland pension curtailment gain.
b) In 2012, asset impairments related to the impairment of SAP implementation costs in Ireland.
c) In 2013, restructuring and advisory costs relate to the
proposed merger of Britvic plc and A.G.Barr plc, and includes a
GBP0.5m pension gain following the retirement of a senior executive
on 28 February 2013. See note 14 for further details.
In the 28 weeks ended 15 April 2012, restructuring costs
included GB-related restructuring costs of GBP2.7m, Ireland
restructuring costs of GBP4.3m and corporate acquisition due
diligence costs of GBP2.1m.
d) In 2012, property and relocation costs related to the
transfer of the Britvic plc head office from Chelmsford to Hemel
Hempstead and a credit against an onerous lease provision relating
to rental income received from a sublet during that year.
e) Other fair value movements relate to the fair value movement
of derivative financial instruments where hedge accounting cannot
be applied.
Details of tax implications of exceptional items are given in
note 7.
7. Taxation
The tax charge not including tax on exceptional and other items
is GBP9.0m (28 weeks ended 15 April 2012: GBP6.1m) which equates to
an effective tax rate 24.0% (28 weeks ended 15 April 2012:
24.6%).
Included in the total tax charge for the 28 weeks ended 14 April
2013 is a tax credit on exceptional and other items of GBP0.9m (28
weeks ended 15 April 2012: GBP0.7m credit).
Changes to the main rate of UK corporation tax are proposed, to
reduce the rate by 2% to 21% by 1 April 2014 and by a further 1% to
20% by 1 April 2015. These changes had not been substantively
enacted at the balance sheet date and consequently were not
included in these financial statements. The effect of these
proposed reductions would be to reduce the UK net deferred tax
liability by GBP2.1m.
Tax charge by region
28 Weeks Ended 28 Weeks Ended 52 Weeks Ended
30 September
14 April 2013 15 April 2012 2012
GBPm GBPm GBPm
--------- --------------- --------------- ---------------
UK 8.1 6.4 20.4
Foreign - (1.0) (0.3)
Total 8.1 5.4 20.1
--------- --------------- --------------- ---------------
Analysis of tax charge 28 Weeks Ended 28 Weeks Ended 52 Weeks Ended
30 September
14 April 2013 15 April 2012 2012
GBPm GBPm GBPm
-------------------------- --------------- --------------- ---------------
Current income tax
charge 9.2 5.1 12.2
Deferred income tax (1.1) 0.3 7.9
Total tax charge in
the consolidated income
statement 8.1 5.4 20.1
-------------------------- --------------- --------------- ---------------
8. Earnings per share
Basic earnings per share amounts are calculated by dividing the
net profit for the period attributable to the equity shareholders
of the parent by the weighted average number of ordinary shares in
issue during the period.
Diluted earnings per share amounts are calculated by dividing
the net profit attributable to the equity shareholders of the
parent by the weighted average number of ordinary shares
outstanding during the period plus the weighted average number of
ordinary shares that would be issued on the conversion of all the
dilutive potential ordinary shares into ordinary shares.
The following table reflects the income and share data used in
the basic and diluted earnings per share computations:
28 Weeks 28 Weeks 52 Weeks
Ended Ended Ended
14 April 15 April 30 September
2013 2012 2012
GBPm GBPm GBPm
---------------------------------------- ---------- ---------- -------------
Basic earnings per share
Profit for the period attributable
to the equity shareholders 24.7 18.7 57.4
---------------------------------------- ---------- ---------- -------------
Weighted average number of
ordinary shares in issue for
basic earnings per share 242.4 241.4 241.6
---------------------------------------- ---------- ---------- -------------
Basic earnings per share 10.2p 7.7p 23.8p
---------------------------------------- ---------- ---------- -------------
Diluted earnings per share
Profit for the period attributable
to the equity shareholders 24.7 18.7 57.4
---------------------------------------- ---------- ---------- -------------
Weighted average number of
ordinary shares in issue for
diluted earnings per share 245.2 256.8 256.6
---------------------------------------- ---------- ---------- -------------
Diluted earnings per share 10.1p 7.3p 22.4p
---------------------------------------- ---------- ---------- -------------
The group presents as exceptional and other items on the face of
the Consolidated Income Statement, those significant items of income
and expense which, because of the nature and infrequency of the events
giving rise to them, merit separate presentation to allow shareholders
to understand better the elements of financial performance in the
period, so as to facilitate comparison with prior periods and to
assess trends in financial performance more readily.
To this end, basic and diluted earnings per share are also presented
on this basis with the amortisation of acquisition related intangible
assets also added back using the weighted average number of ordinary
shares for both basic and diluted amounts as per the tables below.
In addition, adjusted diluted earnings per share have been modified
to exclude the impact of share options that have been granted but
not yet vested.
28 Weeks 28 Weeks 52 Weeks
Ended Ended Ended
14 April 15 April 30 September
2013 2012 2012
GBPm GBPm GBPm
---------------------------------------- ---------- ---------- -------------
Adjusted basic earnings per
share
Profit for the period attributable
to equity shareholders 24.7 18.7 57.4
Add: Net impact of exceptional
and other items 3.8 - 5.5
Add: Intangible assets amortisation
(acquisition related) 1.6 1.5 2.9
---------------------------------------- ---------- ---------- -------------
30.1 20.2 65.8
---------------------------------------- ---------- ---------- -------------
Weighted average number of
ordinary shares in issue for
adjusted basic earnings per
share 242.4 241.4 241.6
---------------------------------------- ---------- ---------- -------------
Adjusted basic earnings per
share 12.4p 8.4p 27.2p
---------------------------------------- ---------- ---------- -------------
Adjusted diluted earnings per
share
Profit for the period attributable
to equity shareholders before
exceptional and other items
and acquisition related intangible
assets amortisation 30.1 20.2 65.8
Weighted average number of
ordinary shares in issue for
adjusted diluted earnings per
share 246.8 249.0 248.8
---------------------------------------- ---------- ---------- -------------
Adjusted diluted earnings per
share 12.2p 8.1p 26.5p
---------------------------------------- ---------- ---------- -------------
9. Property, plant and equipment and Intangible assets
Property, plant and equipment
During the 28 weeks ended 14 April 2013, the group purchased
assets with a cost of GBP11.7m (28 weeks ended 15 April 2012:
GBP19.5m).
Assets with a net book value of GBP2.0m were disposed of by the
group during the 28 weeks ended 14 April 2013 (28 weeks ended 15
April 2012: GBP1.9m) resulting in a loss on disposal of GBP1.9m (28
weeks ended 15 April 2012: loss on disposal GBP0.5m).
There were no impairments during the 28 weeks ended 14 April
2013. During the 28 weeks ended 15 April 2012, 'fixtures, fittings,
tools and equipment' assets with a net book value of GBP4.3m were
impaired. The impairment charge was included within exceptional and
other items. Further details are provided in note 6.
Intangible assets
There were no impairments during the 28 weeks ended 14 April
2013. During the 28 weeks ended 15 April 2012, 'software costs'
with a net book value of GBP9.9m were impaired. The impairment
charge was included within exceptional and other items. Further
details are provided in note 6.
10. Interest-bearing loans and borrowings
Components of current and non-current interest-bearing loans and
borrowings:
14 April 15 April 2012 30 September
2013 2012
GBPm GBPm GBPm
------------------------------ --------- -------------- -------------
Finance leases (0.7) (1.1) (0.8)
2007 Notes (282.4) (274.6) (269.9)
2009 Notes (179.4) (173.1) (171.8)
2010 Notes (119.6) (115.4) (114.5)
Accrued interest (4.9) (5.3) (4.6)
Bank loans (13.0) (35.1) (1.4)
Capitalised issue costs 3.2 4.2 3.7
------------------------------ --------- -------------- -------------
Total interest-bearing loans
and borrowings (596.8) (600.4) (559.3)
------------------------------ --------- -------------- -------------
Current (92.1) - (0.6)
Non-current (504.7) (600.4) (558.7)
------------------------------ --------- -------------- -------------
Total interest-bearing loans
and borrowings (596.8) (600.4) (559.3)
------------------------------ --------- -------------- -------------
Analysis of changes in interest-bearing loans and
borrowings:
28 Weeks 28 Weeks Ended 52 Weeks
Ended Ended
14 April 15 April 2012 30 September
2013 2012
GBPm GBPm GBPm
----------------------------------- --------- --------------- -------------
At the beginning of the period (559.3) (573.2) (573.2)
Net loans (drawn down)/repaid (11.3) (34.8) 0.7
Issue costs - 0.1 -
Repayment of finance leases 0.1 - 0.3
Amortisation and write off of
issue costs (0.5) (0.5) (0.9)
Net translation (loss)/gain /
fair value adjustment (25.5) 8.3 13.5
Net movement in accrued interest (0.3) (0.3) 0.3
----------------------------------- --------- --------------- -------------
At the end of the period (596.8) (600.4) (559.3)
Derivatives hedging balance sheet
debt* 90.2 71.9 65.0
----------------------------------- --------- --------------- -------------
Debt translated at contracted
rate (506.6) (528.5) (494.3)
----------------------------------- --------- --------------- -------------
* Represents the element of the fair value of interest rate
currency swaps hedging the balance sheet value of the Notes. This
amount has been disclosed separately to demonstrate the impact of
foreign exchange movements which are included in interest bearing
loans and borrowings.
11. Issued share capital
The issued share capital as at 14 April 2013 comprised
243,316,658 ordinary shares of GBP0.20 each (30 September 2012:
242,344,551 ordinary shares), totalling GBP48,663,332 (30 September
2012: GBP48,468,910).
The ordinary shares carry voting rights of one vote per share.
There are no restrictions placed on the distribution of dividends,
or the return of capital on a winding up or otherwise.
52 Weeks Ended
28 Weeks Ended 30 September
14 April 2013 2012
GBPm GBPm
---------------------------------------------- --------------- ---------------
Called up, issued and fully paid ordinary
shares
243,316,658 (30 September 2012: 242,344,551)
ordinary shares of GBP0.20 each 48.7 48.5
Share issues in the period relating to incentive schemes for
employees are detailed below:
28 weeks ended 14 April 2013 No of shares Value
issued GBP
------------------------------ ------------- ----------
15 November 2012 116,409 23,282
2 January 2013 123,749 24,750
25 January 2013 53,471 10,694
8 February 2013 89,429 17,886
5 March 2013 89,049 17,810
7 March 2013 500,000 100,000
972,107 194,422
------------------------------ ------------- ----------
Of the issued and fully paid ordinary shares, 431,749 shares (30
September 2012: 217,994 shares) are treasury shares. This equates
to GBP86,350 (30 September 2012: GBP43,599) at GBP0.20 par value of
each ordinary share. These shares are held for the purpose of
satisfying the Britvic plc share schemes.
12. Dividends paid and proposed
52 Weeks
28 Weeks 28 Weeks Ended 30
Ended 14 Ended 15 September
April 2013 April 2012 2012
----------------------- ------------ ------------ -----------
Declared and paid in
the period
Dividends per share
(pence) 12.4 12.6 17.9
------------ ------------ -----------
Total dividend (GBPm) 29.6 29.9 42.5
------------ ------------ -----------
Proposed after the
balance sheet date
Dividend per share
(pence) 5.4 5.3 12.4
------------ ------------ -----------
Total dividend (GBPm) 12.9 12.6 30.1
------------ ------------ -----------
13. Derivatives and hedge relationships
The group has a number of derivative contracts which are
designated as part of effective hedge relationships. These are
included in other financial assets and liabilities as follows:
14 April 15 April 30 September
2013 2012 2012
GBPm GBPm GBPm
--------------------------------------------- --------- --------- -------------
Consolidated balance sheet
Non-current assets: Other financial
assets
Fair value of the 2007 USD GBP cross
currency fixed interest rate swaps(1) 47.2 55.9 49.9
Fair value of the 2009 USD GBP cross
currency floating interest rate swaps(3) 34.8 28.5 27.1
Fair value of the 2009 GBP euro cross
currency floating interest rate swaps(2) 3.2 5.0 11.1
Fair value of the 2010 USD GBP cross
currency floating interest rate swaps(3) 3.1 1.2 1.6
Fair value of the 2010 GBP euro cross
currency fixed interest rate swaps(2) - - 2.4
--------------------------------------------- --------- --------- -------------
88.3 90.6 92.1
--------------------------------------------- --------- --------- -------------
Current assets: Other financial assets
Fair value of the 2007 USD GBP cross 14.8 - -
currency fixed interest rate swaps(1)
Fair value of forward currency contracts(1) 1.7 0.8 0.1
16.5 0.8 0.1
--------------------------------------------- --------- --------- -------------
Current liabilities: Other financial
liabilities
Fair value of forward currency contracts(1) (0.2) (2.7) (1.9)
Fair value of share swaps (1.3) (1.5) (2.3)
Fair value of forward rate agreements - (0.1) -
Fair value of foreign exchange swaps (0.2) - (0.2)
--------------------------------------------- --------- --------- -------------
(1.7) (4.3) (4.4)
--------------------------------------------- --------- --------- -------------
Non-current liabilities: Other financial
liabilities
Fair value of the 2010 USD GBP cross
currency fixed interest rate swaps(1) (2.0) (2.9) (5.0)
Fair value of the 2010 GBP euro cross (1.2) - -
currency fixed interest rate swaps(2)
Fair value of share swaps - (2.3) (2.4)
Fair value of interest rate swaps (3.4) (2.5) (3.5)
--------------------------------------------- --------- --------- -------------
(6.6) (7.7) (10.9)
--------------------------------------------- --------- --------- -------------
(1) Instruments designated as part
of a cash flow hedge relationship
(2) Instruments designated as part
of a net investment hedge relationship
(3) Instruments designated as part
of a fair value hedge relationship
There have been no significant changes to derivative contracts
designated as part of effective hedge relationships in the period.
The derivatives and the hedge relationships are described in more
detail on pages 83 to 87 in the group's Annual Report for the 52
weeks ended 30 September 2012.
The impact on the consolidated statement of comprehensive income
of the derivatives and hedge relationships described above is
summarised in the tables below.
28 Weeks 28 Weeks 52 Weeks
Ended Ended Ended
14 April 15 April 30 September
2013 2012 2012
GBPm GBPm GBPm
------------------------------------------ --------- --------- -------------
Consolidated statement of comprehensive
income
Amounts recycled to the income statement
in respect of cash flow hedges
Forward currency contracts* (0.8) 0.5 (1.7)
2007 cross currency interest rate
swaps** (12.5) 4.0 8.7
2010 cross currency interest rate
swaps** (3.6) 1.2 2.5
------------------------------------------ --------- --------- -------------
(16.9) 5.7 9.5
------------------------------------------ --------- --------- -------------
Gains/(losses) in the period in
respect of cash flow hedges
Forward currency contracts 4.1 (4.0) (1.6)
2007 cross currency interest rate
swaps 12.1 (5.7) (11.7)
2010 cross currency interest rate
swaps 3.1 (1.6) (3.7)
------------------------------------------ --------- --------- -------------
19.3 (11.3) (17.0)
------------------------------------------ --------- --------- -------------
Exchange differences on translation
of foreign operations
Movement on 2009 GBP euro cross
currency interest rate swaps (7.9) 4.4 10.5
Movement on 2010 GBP euro cross
currency interest rate swaps (3.6) 1.1 3.5
Exchange movements on translation
of foreign operations 15.4 (9.4) (17.9)
------------------------------------------ --------- --------- -------------
3.9 (3.9) (3.9)
------------------------------------------ --------- --------- -------------
* Offsetting amounts recorded in
cost of sales
** Offsetting amounts recorded in
finance costs
14. Pensions
At 14 April 2013, the IAS 19 pension deficit in respect of the
group defined benefit pension schemes was GBP40.2m (30 September
2012: net deficit of GBP3.7m). The increase in the overall deficit
is driven primarily by changes to the underlying market conditions
on which the valuation assumptions are based for the GB plan,
including the increase in the RPI from 2.90% at the 30 September
2012 to 3.65% at 14 April 2013 and increase in CPI from 2.10% to
2.65% over the same period.
The retirement of a senior executive on 28 February 2013
resulted in an agreement with the company that the member would
settle the BETUS portion of his benefits through the payment of a
cash lump sum in April 2013. As a result of this settlement, a
GBP0.5m gain has been recognised within restructuring costs in
exceptional and other items in the income statement for the
period.
15. Going concern
The directors are confident that it is appropriate for the going
concern basis to be adopted in preparing the interim report and
financial statements. As at 14 April 2013, the consolidated balance
sheet is showing a net assets position of GBP0.6m. Group reserves
are low due to the capital restructuring undertaken at the time of
flotation. This does not impact on Britvic plc's ability to meet
payments as they fall due or to make dividend payments.
The liquidity of the group remains strong in particular with
GBP491.0m of long term Private Placement Notes with maturity dates
between 2014 and 2022 and a GBP400.0m bank facility maturing in
March 2016. Details are provided in note 22 of the group's 2012
Annual report.
As part of ongoing processes, goodwill and intangible assets
with indefinite lives have been reviewed for indications of
impairment. This review has taken into consideration the current
economic climate.
16. Events after the reporting period
Non-adjusting event
Subsequent to the balance sheet date, on 22 May 2013 the Group
announced significant future restructuring plans. These are
referred to in the Interim Announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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