TIDMBVIC
RNS Number : 6199H
Britvic plc
21 May 2014
Britvic plc Interim Results - 21 May 2014
Britvic plc announces its interim results for the 28 weeks ended
13 April 2014(1)
All numbers quoted are on a constant currency basis and are
pre-exceptional and other items, unless otherwise stated.
Financial highlights:
-- Revenue growth of 4.7% to GBP670.7m, with volume growth of 3.9% and ARP growth of 0.8%
o GB revenue up 5.0%, outperforming the GB take-home soft drinks
market
o France revenue up 7%, with both volume and ARP growth
o Ireland revenue down 5.2% as the consumer environment remained
difficult
-- Group EBITA of GBP60.5m, up 12.9% on last year, driven by
revenue growth and tight cost control
-- Half-year adjusted EPS of 14.5p, up 16.9% on last year
-- Interim dividend of 6.1p, up 13.0% on last year, reflecting confidence in future prospects
Strategic highlights:
-- Focus has remained on building sustainable profit and margin improvement
-- Strong progress on strategic cost initiatives: on-track to
deliver GBP30m annual cost saving by 2016
-- New operating model established with significant change programme nearing completion
-- Nationwide distribution of Fruit Shoot in the USA secured
through additional PAB territories and new independent bottler
agreements
-- Fruit Shoot India launch on track, with in-market production to commence imminently
28 weeks 28 weeks % change % change
ended 13 ended 14 actual exchange constant(1)
April 2014 April 2013 rate exchange
GBPm(1) GBPm(1) rate
------------------------- ------------ ------------ ----------------- -------------
Group Revenue 670.7 639.2 4.9% 4.7%
Group EBITA(2) 60.5 53.6 12.9% 12.9%
EBITA Margin(2) 9.0% 8.4% 60bps 60bps
Group EBIT(7) 59.0 52.0 13.5% 13.5%
Group Profit Before
Tax 45.3 37.5 20.8% 20.8%
Group Profit After
Tax 34.0 28.5 19.3% 19.3%
Group Profit After
Tax, After Exceptional
And Other Items 27.5 24.7 11.3% 11.3%
Adjusted Earnings Per
Share(3) 14.5p 12.4p 16.9% 16.9%
Weighted Average No.
of Shares 245.6 242.4 1.3% -
Interim Dividend Per
Share 6.1p 5.4p 13.0% -
Underlying Free Cash
Flow (4) (30.8) (24.4) (26.2)% -
Group Adjusted Net
Debt (5) (479.4) (503.7) 4.8% -
Adjusted Net Debt:
EBITDA 2.6x 2.9x - -
The board has announced an interim dividend per share of 6.1p,
up 13.0% on last year. This reflects the board's confidence in the
future prospects of our business, the strong free cash flow
generation and our stated progressive dividend policy.
Simon Litherland, Chief Executive Officer commented:
"This has been another period of solid progress for our
business, as we continue to implement the strategy we announced
last year. We have delivered strong revenue, profit and margin
growth in the first half of the year and our cost saving programme
continues to gain traction across our business. We remain on-track
to meet our target of GBP30 million of annual cost savings by 2016.
In addition, our international business is progressing well and the
nationwide distribution of Fruit Shoot in the USA is an important
milestone as we seek to exploit the international potential of our
brands.
"Whilst we anticipate that the consumer environment is likely to
remain challenging across our core markets, we remain confident of
delivering EBIT in the range of GBP148m to GBP156m for the full
year."
For further information please contact:
Investors:
Rupen Shah (PLC Finance and Investor Relations Director) +44 (0) 1442 284330
Steve Nightingale (Senior Investor Relations Manager) +44 (0)
1442 284330
Media:
Susan Turner (Director of Corporate Affairs) +44 (0) 7808
098579
Ben Foster/Rosie Oddy (Pendomer communications) +44 (0) 203 603 5220
There will be a live webcast of the presentation given today at
10:00am by Simon Litherland (Chief Executive Officer) and John
Gibney (Chief Financial Officer). The webcast will be available at
http://ir.britvic.com/, with a transcript available in due
course.
Definitions
(1) Where appropriate, comparisons are quoted using constant
exchange rates. Constant currency change 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.
(2) 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 GBP1.5m (2013: GBP1.6m as reported last year). EBITA margin
is the EBITA as a proportion of group revenues.
(3) 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 245.6m (2013:
242.4m).
(4) Underlying free cash flow is defined as net cash flow
excluding movements in borrowings, dividend payments and
exceptional and other items.
(5) Group adjusted net debt is defined as group net debt, adding
back the impact of derivatives hedging the balance sheet debt.
(6) Return on invested capital (ROIC) - is defined as operating
profit after applying the tax rate for the period, stated before
exceptional and other items, as a percentage of invested capital.
Invested capital is defined as non-current assets plus current
assets less current liabilities, excluding all balances relating to
interest bearing liabilities and all other assets or liabilities
associated with the financing and capital structure of the group
and excluding any deferred tax balances and effective hedges
relating to interest-bearing liabilities.
(7) EBIT is defined as operating profit before exceptional and
other items. EBIT margin is the EBIT as a proportion of group
revenues.
All numbers in this announcement, other than where stated or
included within the financial statements, are disclosed before
exceptional and other items.
Reconciliation from actual exchange rate to constant exchange
rate
2013 actual Change 2013 constant
exchange rate GBPm exchange rate
GBPm GBPm
------------------------------ --------------- ------- ---------------
Group Revenue 639.2 1.6 640.8
------------------------------ --------------- ------- ---------------
Group EBIT 52.0 0.0 52.0
------------------------------ --------------- ------- ---------------
Group Profit Before Tax 37.5 0.0 37.5
------------------------------ --------------- ------- ---------------
Group Profit After Tax (PAT) 28.5 0.0 28.5
------------------------------ --------------- ------- ---------------
Group PAT, After Exceptional
And Other Items 24.7 0.0 24.7
------------------------------ --------------- ------- ---------------
Group EBITA (3) 53.6 0.0 53.6
------------------------------ --------------- ------- ---------------
Adjusted Earnings Per Share
(4) 12.4p 0.0p 12.4p
------------------------------ --------------- ------- ---------------
Basis of preparation
The interim results announcement for the 28 week period ended 13
April 2014 has been prepared in accordance with International
Financial Reporting Standards as adopted by the European Union. The
interim statement of results was approved by the board on 20 May
2014.
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 with PepsiCo brands such as Pepsi, 7UP and Mountain Dew
Energy which Britvic produces and sells in Great Britain (GB) and
Ireland under exclusive PepsiCo agreements.
Britvic is the largest supplier of branded still soft drinks in
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 franchising, export and licensing.
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 12 April 2014. ROI grocery market
data referred to in this announcement is supplied by Nielsen and
runs to 23 March 2014. French market data is supplied by IRI and
runs to 6 April 2014.
Next scheduled announcement
Britvic will publish its quarter three interim management
statement on 24 July 2014.
Chief Executive Officer's Strategic Review
We have reported a strong set of results for the 28 weeks to 13
April 2014 and I am delighted with the progress we have made in
implementing our new strategy that we shared last year.
In each of our core markets the consumer environment has
remained challenging with a focus on value, and shoppers carefully
managing their basket spend. As the business has focused on
executing our plans we have achieved some notable successes.
Performance highlights
-- In GB stills we have seen revenue growth of 2.3%, driven by
ARP growth of 4.0% with a volume decline of 1.7%. During Q2 we
launched SQUASH'D, allowing consumers to enjoy Robinsons out of the
home
-- We have delivered strong growth in GB carbonates this year,
with both volume and ARP growth leading to revenue up 6.8%
-- In the USA we now have nationwide distribution of Fruit
Shoot. With PepsiCo Americas Beverages (PAB) we have moved into new
states, including California, and we have secured a number of new
agreements with independent bottlers such as Admiral Beverages
Corporation (ABC) for states including Idaho and Wyoming
-- In France we delivered a strong performance across the
portfolio. We are delighted with the progress of Fruit Shoot which
has continued to grow and has recently become the number 1 brand in
the kids drinks category
Our new strategy
In May last year I shared our vision for Britvic to become 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
We also announced that we would deliver GBP30m of annualised
cost savings by 2016. Of these annual savings we intend to invest
GBP10m behind the expansion of the International business.
Progress on the strategic initiatives
Over the last 12 months we have made considerable progress on
all of the major initiatives. The Executive Team is now fully
resourced following the appointment in January of Matt Barwell as
Chief Marketing Officer. Each of the business units now has full
accountability for its performance and we have a lighter "PLC"
centre to support this decentralised structure.
The Huddersfield and Chelmsford factories have both closed and
our innovation and quality functions have relocated to other sites.
Ballygowan is now our sole water brand in GB and Ireland, and a
Fruit Shoot production line has been successfully relocated to
France. The support functions in GB and Ireland have been
consolidated with areas such as Finance, HR and Supply Chain all
operating under one leadership team and we have separated out our
wholesale business in Ireland.
Closing any site creates a huge amount of uncertainty for all
affected employees and their families and we have been committed to
minimising job losses and providing as much support as possible. By
working closely with our people and local agencies, a significant
number of employees have already secured new roles, either at other
Britvic sites or with new employers. The commitment to Britvic
during this difficult time has been outstanding and I would like to
acknowledge and thank everyone for their passion, energy and
dedication to Britvic.
Momentum behind our International ambitions
As part of the new Britvic operating model we have created a
fully resourced international business unit under the leadership of
Simon Stewart. Acting independently of GB & Ireland and France,
it is now a team in excess of 100 people located across Europe, the
USA and Asia. In addition to existing Britvic employees
transitioning to a dedicated international role, we have recruited
many new people with the blend of skills and experience we need to
support our growth ambitions.
In the USA I am delighted that we have now achieved nationwide
distribution for Fruit Shoot. This is another important milestone
towards establishing the brand as a leader in the kids drinks
category. We have also put in a significant amount of effort to
ensure our India agreement with the Narang Group for Fruit Shoot
can be realised. We now have in-market resource to support the
Narang team and the supply chain is operational with sustainable,
dedicated production capacity for the brand secured so that
production can commence imminently. Later in the year there will be
a major consumer campaign aligned to the Diwali festival.
Summary
The last year has been one of material change for the
organisation and we have made significant progress in delivering
our transformational programmes, as well as a strong set of results
this year. We are on-track to deliver our cost savings programme,
the core business is performing well and our international
ambitions are developing at pace. This all gives us confidence in
our prospects for long-term growth.
Simon Litherland
Chief Executive Officer
Chief Financial Officer's Review
The following is based on Britvic's results for the 28 weeks
ended 13 April 2014 (1)*
* Definitions can be found on page 2 of this document
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, excluding factored brands sold by
Counterpoint in Ireland and no volume is recorded in respect of
international concentrate sales.
-- Average Realised Price (ARP) - average revenue per litre sold, excluding factored brands.
-- 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.
-- EBITDA - is defined as earnings before interest, tax,
depreciation, amortisation, profit or loss on disposal of tangible
and intangible assets, and exceptional and other items.
-- EBITA - is defined as earnings before interest, tax,
amortisation, and exceptional and other items.
-- 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.
-- Return on invested capital (ROIC) - is defined as operating
profit after applying the tax rate for the period, stated before
exceptional and other items, as a percentage of invested capital.
Invested capital is defined as non-current assets plus current
assets less current liabilities, excluding all balances relating to
interest bearing liabilities and all other assets or liabilities
associated with the financing and capital structure of the group
and excluding any deferred tax balances and effective hedges
relating to interest-bearing liabilities.
Overview
In the period the group sold over 1 billion litres of soft
drinks, an increase of 3.9% on the previous year. With Average
Realised Price (ARP) increasing by 0.8%, the group's revenue was up
4.7% compared to the first half of 2013, on a constant currency
basis. The first half incorporates 28 weeks of fixed costs but
represents less than half of our expected revenue for the year and
is a working capital high point for the business ahead of the
summer months.
The focus has remained on building sustainable profit and margin
improvement. This year EBITA is up 12.9%. EBITA margin has improved
by 60bps this year and by 250bps over the last 2 years. Compared to
last year there is approximately an GBP8m benefit as a result of
costs related to the recall in 2012 not recurring. However, as part
of the strategy to invest in the equity of our brands, A&P
spend this year has increased by nearly GBP9m compared to last
year, which is included within brand contribution.
GB stills 28 weeks ended 28 weeks ended % change
13 April 2014 14 April 2013 actual exchange
GBPm GBPm rate
--------------- --------------- -----------------
Volume (millions litres) 189.6 192.9 (1.7)
ARP per litre 88.3p 84.9p 4.0
Revenue 167.4 163.7 2.3
Brand contribution 82.9 81.4 1.8
Brand contribution margin 49.5% 49.7% (20)bps
As part of our commercial change programme we have continued to
benefit from stronger revenue management disciplines this year. H1
revenue was up 2.3% thanks to growth in Q2 of 4.4%, with improved
pricing and only a marginal decline of 0.3% in Q2 volume. Our focus
continues to be one of driving sustainable value in our portfolio.
Fruit Shoot continued to see volume and value growth, the overall
volume decline has been driven by Robinsons and J20. In the latter
part of the period we launched Robinsons SQUASH'D, a highly
concentrated pack of 66ml that offers the same number of servings
as a traditional 1 litre bottle, which has a positive impact on ARP
and a more limited effect on volume. This year we have also seen a
planned increase in A&P spend which has restricted the brand
contribution growth and impacted margin.
GB carbonates 28 weeks ended 28 weeks ended % change
13 April 2014 14 April 2013 actual exchange
GBPm GBPm rate
--------------- --------------- -----------------
Volume (millions litres) 616.7 580.9 6.2
ARP per litre 46.1p 45.9p 0.4
Revenue 284.6 266.6 6.8
Brand contribution 104.8 100.2 4.6
Brand contribution margin 36.8% 37.6% (80)bps
The first half of the year saw both volume and ARP growth,
leading to revenue growth of 6.8%. Q2 in particular was very
strong, with revenue up nearly 11%, with growth in packs such as 2
litre in the take-home channel and dispense from new business wins
in leisure retail. ARP in Q2 was down marginally compared to last
year where we generated a 4.7% growth on 2012, as a result of our
focus on protecting value and margin. This year each of our key
brands has delivered revenue growth.
Compared to last year there has been a planned increase in
A&P spend as we continue to invest behind our brand portfolio.
Brand contribution was up 4.6% with margin down 80bps as a result
of the increased A&P investment.
France 28 weeks ended 28 weeks ended % change % change
13 April 2014 14 April 2013 actual exchange constant exchange
GBPm GBPm rate rate
--------------- --------------- ----------------- -------------------
Volume (millions
litres) 141.5 134.3 5.4 5.4
ARP per litre 90.0p 87.9p 2.4 1.5
Revenue 127.4 118.0 8.0 7.0
Brand contribution 30.3 26.7 13.5 12.2
Brand contribution
margin 23.8% 22.6% 120bps 110bps
In France we have delivered another excellent performance in a
challenging consumer environment. With volume growth of 5.4% and
ARP growth of 1.5%, revenue was up 7.0% on last year. In a subdued
soft drinks market the key categories of syrups and kids juice
drinks are in growth and we continued to grow share. Fruit Shoot
has had a strong first half, and is now the number 1 brand in the
category by value.
A&P spend was significantly up on the previous year as we
invested in the portfolio. Brand contribution, which is after
A&P, was up 12.2% with margin expansion of 110bps.
Ireland 28 weeks ended 28 weeks ended % change % change
13 April 2014 14 April 2013 actual exchange constant exchange
GBPm GBPm rate rate
--------------- --------------- ----------------- -------------------
Volume (millions
litres) 99.5 98.7 0.8 0.8
ARP per litre 53.1p 55.7p (4.7) (5.3)
Revenue 64.2 67.2 (4.5) (5.2)
Brand contribution 21.0 24.2 (13.2) (13.9)
Brand contribution
margin 32.7% 36.0% (330)bps (330)bps
Note: Volumes and ARP include own-brand soft drinks sales and do
not include factored product sales included within total revenue
and brand contribution
Market conditions in Ireland have remained difficult with
consumers continuing to seek value amid a competitive trading
environment. Modest volume growth has been outweighed by the impact
of promotional activity and channel mix. In carbonates the market
has been particularly competitive whilst key categories such as
dilutables and kids drinks have both seen value and volume decline
in the last quarter. We have gained a small amount of value share
with a small volume share loss in the take home channel. The
licensed wholesale business was successfully launched as a
standalone business under the Counterpoint brand in the first
quarter of the year. With a management team, systems and processes
in place, it is well positioned for the future.
International 28 weeks ended 28 weeks ended % change
13 April 2014 14 April 2013 actual exchange
GBPm GBPm rate
--------------- --------------- -----------------
Volume (millions litres) 20.5 21.0 (2.4)
ARP per litre 132.2p 112.9p 17.1
Revenue 27.1 23.7 14.3
Brand contribution 10.7 9.1 17.6
Brand contribution margin 39.5% 38.4% 110bps
Note: Concentrate sales are included in both revenue and ARP but
do not have any associated volume
As part of the implementation of the new operating model,
responsibility for France exports has been transferred to the
international business and we have represented prior year numbers
to ensure accurate comparisons. The volume decline this year is
primarily as a result of the pricing action taken on low margin
exports as we focus on driving sustainable value growth. The
expansion in the USA over the last 12 months has led to a near
doubling of concentrate revenue, driving ARP and margin growth. The
expansion of Fruit Shoot in the USA and other markets has been
supported by a planned increase in A&P.
Fixed costs 28 weeks ended 28 weeks ended % change
13 April 2014 14 April 2013 actual exchange
GBPm GBPm rate
--------------- --------------- -----------------
Non-brand A&P (5.1) (4.3) (18.6)
Fixed supply chain (54.5) (54.0) (0.9)
Selling costs (65.6) (64.5) (1.7)
Overheads and other (65.5) (66.8) 1.9
Total (190.7) (189.6) (0.6)
------------------------- --------------- --------------- -----------------
Total A&P investment (30.9) (22.0) (40.5)
A&P as a % of own-brand
revenue 4.7% 3.5% (120)bps
Fixed costs were marginally up this year to GBP190.7m. The
benefit of the strategic cost initiatives is weighted to the second
half of the year, reflecting the closure of the factories late on
in the period. As part of the strategy to increase investment
behind the brands there has been an increase in trade spend this
year. Alongside A&P, trade spend is invested in-store to drive
feature and display as well as support the development of strategic
initiatives. Following changes made as a result of the
implementation of the operating model the fixed costs for last year
have been restated to reflect movements between the fixed supply
chain, selling costs and overheads and other categories to ensure
like-for-like comparisons. The total fixed costs for last year
remain the same.
Exceptional and other items
In the period, we accounted for a net charge of GBP8.2m of
pre-tax (GBP6.5m post tax) exceptional and other costs. These
include:
-- Corporate exceptional items of GBP10.2m, relating to the
implementation of the strategic cost initiatives announced at
interims in May 2013.
-- Other fair value movements gain of GBP2.0m. Within
exceptional and other items we include the fair value movement of
financial instruments where hedge accounting could not be applied.
This was made up of two items, a number of share swaps to satisfy
our employee incentive share schemes and interest-rate swaps.
The cash costs of exceptional items in the period were
GBP13.3m.
Interest
The net finance charge before exceptional and other items for
the 28 week period for the group was GBP13.7m compared with
GBP14.5m in the same period in the prior year, reflecting the lower
debt profile of the group.
Taxation
The tax charge before exceptional items was GBP11.3m which
equates to an effective tax rate of 24.9% (28 weeks ended 14 April
2013: 24.0% and 52 weeks ended 29 September 2013: 23.6%). The
increase in the effective tax rate reflects the increase in the
French corporate tax rate during the period and start-up losses
incurred in some of the Group's International expansion for which
no tax relief is currently available. In 2013 the Group's effective
tax rate had benefited from the retranslation of its deferred tax
liability on the phased reduction in the UK corporate tax rate. A
comparable benefit is not available for 2014.
Earnings per share
Adjusted basic EPS for the period, excluding exceptional and
other items and acquisition related amortisation, was 14.5p, up
16.9% on the same period last year of 12.4p.
Basic EPS (after exceptional and other items charges post-tax)
for the period was 11.2p compared with 10.2p for the same period
last year.
Dividends
The board is recommending an interim dividend of 6.1p per share,
an increase of 13.0% on the dividend declared last year, with a
total value of GBP15.0m. The interim dividend will be paid on 11
July 2014 to shareholders on record as at 30 May 2014. The
ex-dividend date is 28 May 2014.
Cash flow and net debt
Underlying free cash flow was a GBP30.8m outflow, compared to a
GBP24.4m outflow the previous year. Please note the first half of
the year represents a working capital high for the group due to
stock building ahead of the key summer period and impact of
reporting mid-month for the interims. Capital expenditure was
higher than last year, largely due to re-phasing into 2014. The
increase in pension contributions was due to the planned additional
contributions in GB. Overall adjusted net debt came down by over
GBP24m and took our leverage to 2.6x EBITDA from 2.9x last year.
The adjusted net debt (taking into account the foreign exchange
movements on the derivatives hedging our US Private Placement debt)
at 13 April 2014 was GBP479.4m, compared to GBP503.7m at interims
last year.
Strategic cost savings
A dedicated project management office (PMO) has been established
to oversee both the delivery and tracking of the cost and benefit
analysis of the strategic initiatives that contribute to the GBP30m
cost savings and operating model design. The programme change
director reports to both the executive committee and the board on a
regular basis to update them on the associated revenue costs,
capital, exceptional items and risk. The cost savings programme
remains on-track to deliver annual savings of GBP30m by 2016.
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.
On 20 February 2014, Britvic plc repaid US$102m and GBP25m of
Notes in the United States private placement market (USPP). These
Notes were repaid using funds received from the issuance of 2014
Notes (see below). The 2007 cross currency interest rate swap
instruments which had been designated as part of a cash flow hedge
relationship against the future cash flows associated with this
maturing portion of the 2007 Notes, also matured on 20 February
2014.
On 20 February 2014, Britvic plc issued US$114m and GBP35m of
Senior Notes with maturities between 7 and 12 years in the United
States private placement market ('the 2014 Notes'). The proceeds
from the 2014 Notes were principally used to repay amounts due in
relation to the maturity of certain tranches of the 2007 Notes.
The group has GBP920m 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 2026
providing the business with a secure funding platform. At 13 April
2014, the group's unadjusted net debt of GBP504.9m (excluding
derivative hedges) consisted of GBP0.8m drawn under the group's
committed bank facilities, GBP545.7m of private placement notes,
GBP4.6m of accrued interest and GBP0.4m of finance leases, offset
by net cash and cash equivalents of GBP43.9m and unamortised loan
issue costs of GBP2.7m. 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 was GBP479.4m which compares to GBP503.7m at 14 April
2013.
Pensions
At 13 April 2014, the IAS 19 pension surplus in respect of the
group defined benefit pension schemes was GBP3.3m (29 September
2013: net deficit of GBP19.3m). The reduction in the deficit was
predominately driven by the additional employer contributions made
to the GB plan of GBP20.0m in the first half of the year combined
with positive investment performance over the period amounting to
GBP6.8m. Changes to the demographic assumptions on which the IAS19
valuation for the GB plan is based resulted in a reduction in the
deficit, although this was largely offset by an increase in the
deficit due to changes in financial assumptions.
The defined benefit section of the GB plan was closed to new
members on 1 August 2002, and closed to future accrual for active
members from 10 April 2011, with new members being invited to join
the defined contribution scheme. The actuarial valuation of this
scheme as at 31 March 2013 is currently underway, and will be
completed by 30 June 2014.
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 insight, 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.
Risk management process
Britvic operates a robust risk management process that has been
further strengthened over recent years.
Risk identification, analysis and mitigation planning is
undertaken at all levels of the business through functional and
operational teams. Each risk is assigned an owner at management
level who has responsibility for ensuring that appropriate actions
are taken to manage the risk. A dedicated Risk and Insurance
Manager manages and supports this process and owns the group-wide
risk register.
Risks are regularly reviewed and monitored by Business Unit or
functional management teams. The executive team review the major
risks across the group on a quarterly basis to ensure that the
management of these risks has appropriate focus. The board review
these at least twice a year.
The principal risks that could potentially have a significant
impact on our business in the future are set out on page 19 of the
annual report, which can be downloaded at www.britvic.com.
BRITVIC PLC
INTERIM FINANCIAL STATEMENTS
For the 28 weeKS ENDED 13 april 2014
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 13 April 2014. 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
Simon Litherland
John Gibney
Joanne Averiss
Ben Gordon
Bob Ivell
Michael Shallow
Ian McHoul (appointed 10 March 2014)
By order of the board
Simon Litherland
Chief Executive Officer
John Gibney
Chief Financial Officer
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 13 April 2014 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 13 April 2014
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
20 May 2014
consolidated income statement
For the 28 weeks ended 13 April 2014
28 weeks 28 weeks 52 weeks
ended 13 April 2014 ended 14 April 2013 ended 29 September
2013
(unaudited) (unaudited) (audited)
------------------------------------ ------------------------------------ ------------------------------------
Before Exceptional Total Before Exceptional Total Before Exceptional Total
exceptional and exceptional and exceptional and
and other and other other and other
other items* items items* other items*
items items
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------ -------- ------------
Revenue 5 670.7 - 670.7 639.2 - 639.2 1,321.9 - 1,321.9
Cost of sales (320.9) - (320.9) (311.7) - (311.7) (646.9) - (646.9)
---------------- ----- ------------ ------------ -------- ------------ ------------ -------- ------------ ------------ --------
Gross profit 349.8 - 349.8 327.5 - 327.5 675.0 - 675.0
Selling and
distribution
costs (194.4) - (194.4) (192.3) - (192.3) (351.5) - (351.5)
Administration
expenses (96.4) (8.7) (105.1) (83.2) (4.8) (88.0) (188.5) (26.2) (214.7)
---------------- ----- ------------ ------------ -------- ------------ ------------ -------- ------------ ------------ --------
Operating
profit/(loss) 59.0 (8.7) 50.3 52.0 (4.8) 47.2 135.0 (26.2) 108.8
Finance costs (13.7) 0.5 (13.2) (14.5) 0.1 (14.4) (26.9) 0.7 (26.2)
---------------- ----- ------------ ------------ -------- ------------ ------------ -------- ------------ ------------ --------
Profit/(loss)
before tax 45.3 (8.2) 37.1 37.5 (4.7) 32.8 108.1 (25.5) 82.6
Taxation 7 (11.3) 1.7 (9.6) (9.0) 0.9 (8.1) (25.5) 4.8 (20.7)
Profit/(loss)
for the period
attributable
to the equity
shareholders 34.0 (6.5) 27.5 28.5 (3.8) 24.7 82.6 (20.7) 61.9
---------------- ----- ------------ ------------ -------- ------------ ------------ -------- ------------ ------------ --------
Earnings per
share
Basic earnings
per share 8 11.2p 10.2p 25.5p
------------ ------------ -------- ------------ ------------ -------- ------------ ------------ --------
Diluted
earnings
per share 8 11.2p 10.1p 25.3p
------------ ------------ -------- ------------ ------------ -------- ------------ ------------ --------
Adjusted basic
earnings per
share** 8 14.5p 12.4p 35.2p
------------ ------------ -------- ------------ ------------ -------- ------------ ------------ --------
Adjusted
diluted
earnings per
share** 8 14.4p 12.2p 34.9p
------------ ------------ -------- ------------ ------------ -------- ------------ ------------ --------
* 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.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the 28 weeks ended 13 April 2014
28 weeks 28 weeks 52 weeks
ended ended ended
13 April 14 April 29 September
2014 2013 2013
(unaudited) (unaudited) (audited)
Note GBPm GBPm GBPm
------------------------------------------------- ----- ------------ ------------ -------------
Profit for the period attributable to the
equity shareholders 27.5 24.7 61.9
Other comprehensive income:
Items that will not be reclassified to
profit or loss
Remeasurement gains /(losses) on defined
benefit pension schemes 1.0 (52.4) (32.4)
Deferred tax on remeasurement gains/(losses)
on defined benefit pension schemes (4.1) 9.6 4.4
Current tax on additional pension contributions 4.1 2.4 3.1
------------------------------------------------- ----- ------------ ------------ -------------
1.0 (40.4) (24.9)
------------------------------------------------- ----- ------------ ------------ -------------
Items that may be subsequently reclassified
to profit or loss
(Losses)/gains in the period in respect
of cash flow hedges 13 (23.2) 19.3 (1.4)
Amounts recycled to the income statement
in respect of cash flow hedges 13 21.5 (16.9) 0.1
Deferred tax in respect of cash flow hedges
accounted for in the hedging reserve 0.3 (0.6) 0.4
Exchange differences on translation of
foreign operations 13 (0.8) 3.9 -
Tax on exchange differences accounted for
in the translation reserve 0.9 (0.7) (2.9)
Deferred tax on other temporary differences - - 0.2
------------------------------------------------- ----- ------------ ------------ -------------
(1.3) 5.0 (3.6)
------------------------------------------------- ----- ------------ ------------ -------------
Other comprehensive income for the period
net of tax (0.3) (35.4) (28.5)
------------------------------------------------- ----- ------------ ------------ -------------
Total comprehensive income for the period
attributable to the equity shareholders 27.2 (10.7) 33.4
------------------------------------------------- ----- ------------ ------------ -------------
CONSOLIDATED BALANCE SHEET
As at 13 April 2014
13 April 2014 14 April 2013 29 September
2013
(unaudited) (unaudited) (audited)
Note GBPm GBPm GBPm
------------------------------- ----- -------------- -------------- -------------
Assets
Non-current assets
Property, plant and equipment 9 211.9 232.6 215.7
Intangible assets 9 313.7 318.7 317.0
Other receivables 4.2 4.6 3.8
Other financial assets 13 50.3 88.3 62.5
Pension asset 15 7.8 - 0.1
------------------------------- ----- -------------- -------------- -------------
587.9 644.2 599.1
------------------------------- ----- -------------- -------------- -------------
Current assets
Inventories 87.8 86.2 90.8
Trade and other receivables 296.8 294.3 266.1
Other financial assets 13 3.3 16.5 12.8
Cash and cash equivalents 44.4 7.4 94.0
432.3 404.4 463.7
------------------------------- ----- -------------- -------------- -------------
Total assets 1,020.2 1,048.6 1,062.8
------------------------------- ----- -------------- -------------- -------------
Current liabilities
Trade and other payables (349.6) (361.7) (381.5)
Bank overdrafts (0.5) (4.5) (2.5)
Interest-bearing loans
and borrowings 10 (21.8) (92.1) (91.6)
Other financial liabilities 13 (1.4) (1.7) (1.4)
Current income tax payable (15.8) (8.5) (17.0)
Provisions (7.2) - (10.5)
Other current liabilities (0.4) - -
(396.7) (468.5) (504.5)
Non-current liabilities
Interest-bearing loans
and borrowings 10 (527.0) (504.7) (458.3)
Deferred tax liabilities (28.2) (26.1) (27.8)
Pension liability 15 (4.5) (40.2) (19.4)
Other financial liabilities 13 (17.0) (6.6) (10.0)
Other non-current liabilities (1.5) (1.9) (1.9)
------------------------------- ----- -------------- -------------- -------------
(578.2) (579.5) (517.4)
------------------------------- ----- -------------- -------------- -------------
Total liabilities (974.9) (1,048.0) (1,021.9)
------------------------------- ----- -------------- -------------- -------------
Net assets 45.3 0.6 40.9
------------------------------- ----- -------------- -------------- -------------
Capital and reserves
Issued share capital 11 49.4 48.7 49.0
Share premium account 33.5 20.9 25.0
Own shares reserve (3.7) (1.9) (1.1)
Share scheme reserve 8.2 5.9 7.5
Hedging reserve 1.3 5.4 2.7
Translation reserve 19.7 25.7 19.6
Merger reserve 87.3 87.3 87.3
Retained losses (150.4) (191.4) (149.1)
------------------------------- ----- -------------- -------------- -------------
Total equity 45.3 0.6 40.9
------------------------------- ----- -------------- -------------- -------------
CONSOLIDATED STATEMENT OF CASH FLOWS
For the 28 weeks ended 13 April 2014
28 weeks ended 28 weeks ended 52 weeks
ended
13 April 2014 14 April 2013 29 September
2013
(unaudited) (unaudited) (audited)
Note GBPm GBPm GBPm
--------------------------------------- ----- --------------- --------------- --------------
Cash flows from operating activities
Profit before tax 37.1 32.8 82.6
Finance costs 13.2 14.4 26.2
Other financial instruments (1.5) (3.3) (6.0)
Impairment of property, plant
and equipment and intangible
assets 6, 9 - - 12.9
Depreciation 17.9 18.4 36.6
Amortisation 4.6 5.1 7.1
Share-based payments 4.5 2.5 6.2
Net pension charge less contributions (22.0) (16.4) (17.2)
Decrease/(increase) in inventory 2.6 (9.5) (14.9)
(Increase)/decrease in trade
and other receivables (31.9) (32.2) (4.7)
(Decrease)/increase in trade
and other payables (26.7) (6.2) 9.9
(Decrease)/increase in provisions (3.3) - 10.5
Loss on disposal of tangible
and intangible assets 1.1 1.9 3.8
Income tax paid (8.3) (5.2) (11.2)
--------------------------------------- ----- --------------- --------------- --------------
Net cash flows from operating
activities (12.7) 2.3 141.8
--------------------------------------- ----- --------------- --------------- --------------
Cash flows from investing activities
Proceeds from sale of property,
plant and equipment - 0.1 0.3
Purchase of property, plant
and equipment (19.8) (15.1) (26.3)
Purchase of intangible assets (3.6) (2.0) (8.9)
Net cash flows used in investing
activities (23.4) (17.0) (34.9)
--------------------------------------- ----- --------------- --------------- --------------
Cash flows from financing activities
Interest paid (12.9) (13.8) (26.6)
Interest-bearing loans (repaid)/drawn
down 10 (0.1) 11.2 (0.9)
Repayment of 2007 USPP Notes 10 (76.8) - -
Issue of 2014 USPP Notes 10 105.8 - -
Issue of shares 4.3 2.1 7.1
Dividends paid to equity shareholders 12 (31.8) (29.6) (42.5)
Net cash flows used in financing
activities (11.5) (30.1) (62.9)
--------------------------------------- ----- --------------- --------------- --------------
Net (decrease)/increase in cash
and cash equivalents (47.6) (44.8) 44.0
Cash and cash equivalents at
beginning of period 91.5 47.6 47.6
Exchange rate differences - 0.1 (0.1)
--------------------------------------- ----- --------------- --------------- --------------
Cash and cash equivalents at
the end of the period 43.9 2.9 91.5
--------------------------------------- ----- --------------- --------------- --------------
By balance sheet category:
Cash and cash equivalents 44.4 7.4 94.0
Bank overdrafts (0.5) (4.5) (2.5)
--------------------------------------- ----- --------------- --------------- --------------
43.9 2.9 91.5
--------------------------------------- ----- --------------- --------------- --------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the 28 weeks ended 13 April 2014
Issued Share Own shares Share Hedging Translation Merger Retained Total
share premium reserve scheme reserve reserve reserve losses
capital account reserve
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 29 September
2013 (audited) 49.0 25.0 (1.1) 7.5 2.7 19.6 87.3 (149.1) 40.9
Profit for the
period - - - - - - - 27.5 27.5
Other
comprehensive
income - - - - (1.4) 0.1 - 1.0 (0.3)
---------------- --------- --------- ----------- --------- --------- ------------ --------- --------- -------
Total
comprehensive
income - - - - (1.4) 0.1 - 28.5 27.2
---------------- --------- --------- ----------- --------- --------- ------------ --------- --------- -------
Issue of shares 0.4 8.5 (5.4) - - - - - 3.5
Own shares
utilised
for share
schemes - - 2.8 (3.1) - - - 1.1 0.8
Movement in
share-based
schemes - - - 3.8 - - - - 3.8
Current tax on
share-based
payments - - - - - - - 0.4 0.4
Deferred tax on
share-based
payments - - - - - - - 0.5 0.5
Payment of
dividend - - - - - - - (31.8) (31.8)
At 13 April
2014
(unaudited) 49.4 33.5 (3.7) 8.2 1.3 19.7 87.3 (150.4) 45.3
---------------- --------- --------- ----------- --------- --------- ------------ --------- --------- -------
Issued Share Own shares Share Hedging Translation Merger Retained Total
share premium reserve scheme reserve reserve reserve losses
capital account reserve
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
---------------- --------- --------- ----------- --------- --------- ------------ --------- --------- -------
notes to the financial information
For the 28 weeks ended 13 April 2014
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 29
September 2013, 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 20 May 2014.
2. Basis of preparation
These interim financial statements comprise the consolidated
balance sheet as at 13 April 2014 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 70 - 76 of the group's 2013
annual report.
During the period, the group adopted a number of interpretations
and amendments to standards including IAS 19 (Revised) 'Employee
Benefits' and IFRS 13 'Fair Value Measurement', both of 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
-- Ireland - including Northern Ireland
-- France
-- International
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 GB Stills GB Carbs Total Ireland France International Total
13 April 2014 GBPm GBPm GB GBPm GBPm GBPm GBPm
GBPm
Revenue 167.4 284.6 452.0 64.2 127.4 27.1 670.7
----------------------- ---------- --------- ------ -------- ------- -------------- -------
Brand contribution 82.9 104.8 187.7 21.0 30.3 10.7 249.7
----------------------- ---------- --------- ------ -------- ------- -------------- -------
Non-brand advertising
& promotion * (5.1)
----------------------- ---------- --------- ------ -------- ------- -------------- -------
Fixed supply chain** (54.5)
----------------------- ---------- --------- ------ -------- ------- -------------- -------
Selling costs** (65.6)
----------------------- ---------- --------- ------ -------- ------- -------------- -------
Overheads and
other costs* (65.5)
----------------------- ---------- --------- ------ -------- ------- -------------- -------
Operating profit
before exceptional
and other items 59.0
----------------------- ---------- --------- ------ -------- ------- -------------- -------
Finance costs (13.7)
----------------------- ---------- --------- ------ -------- ------- -------------- -------
Exceptional and
other items (8.2)
----------------------- ---------- --------- ------ -------- ------- -------------- -------
Profit before
tax 37.1
----------------------- ---------- --------- ------ -------- ------- -------------- -------
28 weeks ended GB Stills GB Carbs Total Ireland France International Total
14 April 2013 GBPm GBPm GB GBPm GBPm GBPm GBPm
GBPm
Revenue *** 163.7 266.6 430.3 67.2 118.0 23.7 639.2
----------------------- ---------- --------- ------ -------- ------- -------------- -------
Brand contribution
*** 81.4 100.2 181.6 24.2 26.7 9.1 241.6
----------------------- ---------- --------- ------ -------- ------- -------------- -------
Non-brand advertising
& promotion * (4.3)
----------------------- ---------- --------- ------ -------- ------- -------------- -------
Fixed supply chain** (54.0)
----------------------- ---------- --------- ------ -------- ------- -------------- -------
Selling costs** (64.5)
----------------------- ---------- --------- ------ -------- ------- -------------- -------
Overheads and
other costs* (66.8)
----------------------- ---------- --------- ------ -------- ------- -------------- -------
Operating profit
before exceptional
and other items 52.0
----------------------- ---------- --------- ------ -------- ------- -------------- -------
Finance costs (14.5)
----------------------- ---------- --------- ------ -------- ------- -------------- -------
Exceptional and
other items (4.7)
----------------------- ---------- --------- ------ -------- ------- -------------- -------
Profit before
tax 32.8
----------------------- ---------- --------- ------ -------- ------- -------------- -------
52 weeks ended GB Stills GB Carbs Total Ireland France International Total
29 September 2013 GBPm GBPm GB GBPm GBPm GBPm GBPm
GBPm
Revenue *** 340.1 536.4 876.5 136.9 258.2 50.3 1,321.9
----------------------- ---------- --------- ------ -------- ------- -------------- --------
Brand contribution
*** 154.5 200.1 354.6 49.0 63.2 18.8 485.6
----------------------- ---------- --------- ------ -------- ------- -------------- --------
Non-brand advertising
& promotion * (7.3)
----------------------- ---------- --------- ------ -------- ------- -------------- --------
Fixed supply chain
** (100.7)
----------------------- ---------- --------- ------ -------- ------- -------------- --------
Selling costs
** (124.5)
----------------------- ---------- --------- ------ -------- ------- -------------- --------
Overheads and
other costs * (118.1)
----------------------- ---------- --------- ------ -------- ------- -------------- --------
Operating profit
before exceptional
and other items 135.0
----------------------- ---------- --------- ------ -------- ------- -------------- --------
Finance costs (26.9)
----------------------- ---------- --------- ------ -------- ------- -------------- --------
Exceptional and
other items (25.5)
----------------------- ---------- --------- ------ -------- ------- -------------- --------
Profit before
tax 82.6
----------------------- ---------- --------- ------ -------- ------- -------------- --------
* 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. As part of the implementation of the
new operating model, certain elements of fixed supply chain costs
have moved to overheads to reflect changes in the organisation
structure. Prior year numbers have been restated to ensure accurate
comparisons.
*** As part of the implementation of the new operating model,
responsibility for France exports has been transferred to the
international business and prior year numbers have been restated to
ensure accurate comparisons.
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 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.
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
13 April 14 April 29 September
2014 2013 2013
Note GBPm GBPm GBPm
----------------------------- ------ --------- --------- -------------
Asset impairments (a) - - (12.9)
Strategic restructuring
costs (b) (10.2) - (10.6)
Aborted merger costs (c) - (8.1) (9.6)
Other fair value movements (d) 2.0 3.4 7.6
Total exceptional and other
items before tax (8.2) (4.7) (25.5)
------------------------------------- --------- --------- -------------
a) In 2013, asset impairments related to the planned closure of
two factories as part of the strategic cost initiatives announced
in May 2013.
b) Strategic restructuring costs in 2013 and 2014 relate to
continued implementation of cost initiatives announced in May 2013,
including costs associated with the closure of two factories and
planned changes to the business operating model.
c) In 2013, costs related to the previously proposed merger of Britvic plc and A.G.Barr plc.
d) Other fair value movements relate to the fair value movement
of derivative financial instruments where hedge accounting cannot
be applied. For the 28 weeks ended 13 April 2014, a GBP1.5m gain is
included within administration expenses (28 weeks ended 14 April
2013: GBP3.3m gain) and a GBP0.5m gain is included within finance
costs (28 weeks ended 14 April 2013: GBP0.1m gain) in the
consolidated income statement.
Details of the tax implications of exceptional items are given
in note 7.
7. Taxation
The tax charge not including tax on exceptional and other items
is GBP11.3m (28 weeks ended 14 April 2013: GBP9.0m) which equates
to an effective tax rate 24.9% (28 weeks ended 14 April 2013:
24.0%).
Included in the total tax charge for the 28 weeks ended 14 April
2013 is a tax credit on exceptional and other items of GBP1.7m (28
weeks ended 14 April 2013: GBP0.9m credit).
Tax charge by region
28 weeks 28 weeks 52 weeks ended
ended ended
13 April 14 April 29 September
2014 2013 2013
GBPm GBPm GBPm
-------------------------------------- --------- --------- ---------------
UK 10.5 8.1 17.0
Foreign (0.9) - 3.7
Total tax charge in the consolidated
income statement 9.6 8.1 20.7
-------------------------------------- --------- --------- ---------------
Analysis of tax charge
28 weeks 28 weeks ended 52 weeks ended
ended
13 April 14 April 2013 29 September
2014 2013
GBPm GBPm GBPm
-------------------------------------- --------- --------------- ---------------
Current income tax charge 12.6 9.2 23.5
Deferred income tax (3.0) (1.1) (2.8)
Total tax charge in the consolidated
income statement 9.6 8.1 20.7
-------------------------------------- --------- --------------- ---------------
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 ended 28 weeks ended 52 weeks
ended
13 April 2014 14 April 2013 29 September
2013
GBPm GBPm GBPm
------------------------------------ --------------- --------------- -------------
Basic earnings per share
Profit for the period attributable
to the equity shareholders 27.5 24.7 61.9
------------------------------------ --------------- --------------- -------------
Weighted average number of
ordinary shares in issue for
basic earnings per share 245.6 242.4 243.2
------------------------------------ --------------- --------------- -------------
Basic earnings per share 11.2p 10.2p 25.5p
------------------------------------ --------------- --------------- -------------
Diluted earnings per share
Profit for the period attributable
to the equity shareholders 27.5 24.7 61.9
------------------------------------ --------------- --------------- -------------
Weighted average number of
ordinary shares in issue for
diluted earnings per share 246.1 245.2 244.7
------------------------------------ --------------- --------------- -------------
Diluted earnings per share 11.2p 10.1p 25.3p
------------------------------------ --------------- --------------- -------------
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.
28 weeks ended 28 weeks ended 52 weeks
ended
13 April 2014 14 April 2013 29 September
2013
GBPm GBPm GBPm
------------------------------------- --------------- --------------- -------------
Adjusted basic earnings per
share
Profit for the period attributable
to equity shareholders 27.5 24.7 61.9
Add: Net impact of exceptional
and other items 6.5 3.8 20.7
Add: Intangible assets amortisation
(acquisition related) 1.5 1.6 2.9
------------------------------------- --------------- --------------- -------------
35.5 30.1 85.5
------------------------------------- --------------- --------------- -------------
Weighted average number of ordinary
shares in issue for adjusted
basic earnings per share 245.6 242.4 243.2
------------------------------------- --------------- --------------- -------------
Adjusted basic earnings per
share 14.5p 12.4p 35.2p
------------------------------------- --------------- --------------- -------------
Adjusted diluted earnings per
share
Profit for the period attributable
to equity shareholders before
exceptional and other items
and acquisition related intangible
assets amortisation 35.5 30.1 85.5
Weighted average number of ordinary
shares in issue for adjusted
diluted earnings per share 246.1 246.8 244.7
------------------------------------- --------------- --------------- -------------
Adjusted diluted earnings per
share 14.4p 12.2p 34.9p
------------------------------------- --------------- --------------- -------------
9. Property, plant and equipment and Intangible assets
Property, plant and equipment
During the 28 weeks ended 13 April 2014, the group purchased
assets with a cost of GBP15.7m (28 weeks ended 14 April 2013:
GBP11.7m).
Assets with net book value of GBP1.1m were disposed of by the
group during the 28 weeks ended 13 April 2014 (28 weeks ended 14
April 2013: GBP2.0m) resulting in a loss on disposal of GBP1.1m (28
weeks ended 14 April 2013: loss on disposal GBP1.9m).
There have been no impairments in the 28 weeks ended 13 April
2014 (28 weeks ended 14 April 2013: GBPnil). During the 52 weeks
ended 29 September 2013, there was an GBP11.2m impairment of plant
and machinery following the strategic cost initiative announcement
in May 2013.
Intangible assets
During the 28 weeks ended 13 April 2014, the group purchased
assets with a cost of GBP3.6m (28 weeks ended 14 April 2013:
GBP2.0m).
There have been no impairments in the 28 weeks ended 13 April
2014 (28 weeks ended 14 April 2013: GBPnil). During the 52 weeks
ended 29 September 2013, the carrying value of goodwill relating to
the Water business was impaired by GBP1.7m following the strategic
cost initiative announcement in May 2013.
10. Interest-bearing loans and borrowings
Components of current and non-current interest-bearing loans and
borrowings:
13 April 14 April 2013 29 September
2014 2013
GBPm GBPm GBPm
------------------------------ --------- -------------- -------------
Finance leases (0.4) (0.7) (0.5)
2007 Notes (176.1) (282.4) (270.3)
2009 Notes (157.7) (179.4) (164.8)
2010 Notes (108.8) (119.6) (112.2)
2014 Notes (103.1) - -
Accrued interest (4.6) (4.9) (3.9)
Bank loans (0.8) (13.0) (1.0)
Capitalised issue costs 2.7 3.2 2.8
------------------------------ --------- -------------- -------------
Total interest-bearing loans
and borrowings (548.8) (596.8) (549.9)
------------------------------ --------- -------------- -------------
Current (21.8) (92.1) (91.6)
Non-current (527.0) (504.7) (458.3)
------------------------------ --------- -------------- -------------
Total interest-bearing loans
and borrowings (548.8) (596.8) (549.9)
------------------------------ --------- -------------- -------------
Analysis of changes in interest-bearing loans and
borrowings:
28 weeks 28 weeks 52 weeks
ended ended ended
13 April 14 April 29 September
2014 2013 2013
GBPm GBPm GBPm
----------------------------------- --------- --------- -------------
At the beginning of the period (549.9) (559.3) (559.3)
Net loans repaid /(drawn down) 0.1 (11.3) 0.6
Partial repayment of 2007 Notes 76.8 - -
Issue of 2014 Notes (105.8) - -
Issue costs 0.4 - -
Repayment of finance leases 0.1 0.1 0.4
Amortisation and write off of
issue costs (0.5) (0.5) (0.9)
Net translation gain/(loss) and
fair value adjustment 30.7 (25.5) 8.6
Net movement in accrued interest (0.7) (0.3) 0.7
----------------------------------- --------- --------- -------------
At the end of the period (548.8) (596.8) (549.9)
Derivatives hedging balance sheet
debt* 25.5 90.2 56.1
----------------------------------- --------- --------- -------------
Debt translated at contracted
rate (523.3) (506.6) (493.8)
----------------------------------- --------- --------- -------------
* 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.
Partial repayment of 2007 Notes
On 20 February 2014, in line with the maturity profile of the
2007 Notes, Britvic plc repaid US$102m and GBP25m of Senior Notes
in the United States private placement market (USPP) using funds
received from the issuance of 2014 Notes (see below).
Britvic plc will continue to make semi-annual interest payments
in US dollars and sterling under the remaining notes.
The group continues to have a number of cross currency interest
rate swaps relating to the remaining tranches of the 2007 Notes.
The swap contracts have the same duration and other critical terms
as the remaining portions of the 2007 Notes which they hedge and
are designated as part of effective hedge relationships (see note
13).
The amount, maturity and interest terms of the remaining 2007
Notes are shown in the table below:
Series Tranche Maturity date Amount Interest terms
------- -------- ----------------- --------- ---------------
D 10 year 20 February 2017 US$147m US$ fixed at
5.90%
E 12 year 20 February 2019 US$126m US$ fixed at
6.00%
F 12 year 20 February 2019 UKGBP13m UKGBP fixed at
5.94%
------- -------- ----------------- --------- ---------------
Issue of 2014 Notes
On 20 February 2014, Britvic plc issued US$114m and GBP35m of
Senior Notes in the United States private placement market ('the
2014 Notes'). The proceeds from the 2014 Notes were principally
used to repay amounts due in relation to the maturity of certain
tranches of the 2007 Notes.
Issue costs incurred in the period relate to the issue of the
2014 Notes.
Britvic plc will make semi-annual interest payments in US
dollars and sterling with the first payment being on 20 August
2014. The 2014 Notes are unsecured and rank pari passu in right of
repayment with other senior unsecured indebtedness of the
group.
The dollar denominated funding has been hedged using
cross-currency interest-rate swaps to meet the group's desired
funding profile and to manage associated foreign currency risk to
the profit and loss account. These cross currency interest rate
swaps have the same duration and other critical terms as the
relevant borrowings they hedge and are designated as part of
effective hedge relationships (see note 13).
The amount, maturity and interest terms of the 2014 Notes are
shown in the table below:
Series Tranche Maturity date Amount Interest terms
------- -------- ----------------- --------- ---------------
A 7 year 20 February 2021 UKGBP20m UKGBP fixed at
3.40%
B 10 year 20 February 2024 UKGBP15m UKGBP fixed at
3.92%
C 10 year 20 February 2024 US$39m US$ fixed at
4.09%
D 12 year 20 February 2026 US$75m US$ fixed at
4.24%
------- -------- ----------------- --------- ---------------
11. Issued share capital
The issued share capital is wholly comprised of ordinary shares
carrying one voting right each. The nominal value of each ordinary
share is GBP0.20. There are no restrictions placed on the
distribution of dividends, or the return of capital on a winding up
or otherwise.
Issued, called up and fully paid ordinary No. of shares Value
shares GBP
------------------------------------------- -------------- -----------
At 30 September 2012 242,344,551 48,468,910
Shares issued 2,746,477 549,295
At 29 September 2013 245,091,028 49,018,205
Shares issued 2,040,207 408,042
At 13 April 2014 247,131,235 49,426,247
------------------------------------------- -------------- -----------
Of the issued and fully paid ordinary shares, 547,960 shares (29
September 2013: 231,547 shares) are own shares held by an employee
benefit trust. This equates to GBP109,592 (29 September 2013:
GBP46,309) at GBP0.20 par value of each ordinary share. These
shares are held for the purpose of satisfying the share
schemes.
12. Dividends paid and proposed
28 weeks ended 28 weeks ended 52 weeks ended
13 April 2014 14 April 2013 29 September
2013
----------------------------- --------------- --------------- ---------------
Declared and paid in the
period
Dividends per share (pence) 13.0 12.4 17.8
--------------- --------------- ---------------
Total dividend (GBPm) 31.8 29.6 42.5
--------------- --------------- ---------------
Proposed after the balance
sheet date
Dividend per share (pence) 6.1 5.4 13.0
--------------- --------------- ---------------
Total dividend (GBPm) 15.0 12.9 31.7
--------------- --------------- ---------------
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:
13 April 14 April 29 September
2014 2013 2013
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) 30.1 47.2 36.9
Fair value of the 2009 USD GBP cross
currency floating interest rate swaps
(3) 12.7 34.8 20.2
Fair value of the 2009 GBP euro cross
currency floating interest rate swaps
(2) 7.5 3.2 5.4
Fair value of the 2010 USD GBP cross - 3.1 -
currency floating interest rate swaps
(3)
50.3 88.3 62.5
--------------------------------------------- --------- --------- -------------
Current assets: Other financial assets
Fair value of the 2007 USD GBP cross
currency fixed interest rate swaps (1) - 14.8 11.4
Fair value of the 2009 USD GBP cross 0.4 - -
currency floating interest rate swaps
(3)
Fair value of forward currency contracts(1) 0.1 1.7 0.1
Fair value of share swaps 2.8 - 1.3
3.3 16.5 12.8
--------------------------------------------- --------- --------- -------------
Current liabilities: Other financial
liabilities
Fair value of forward currency contracts(1) (1.3) (0.2) (1.2)
Fair value of share swaps - (1.3) -
Fair value of foreign exchange swaps (0.1) (0.2) (0.1)
Fair value of interest rate swaps - - (0.1)
(1.4) (1.7) (1.4)
--------------------------------------------- --------- --------- -------------
Non-current liabilities: Other financial
liabilities
Fair value of the 2010 USD GBP cross
currency fixed interest rate swaps(1) (6.9) (2.0) (4.9)
Fair value of the 2010 GBP euro cross
currency fixed interest rate swaps(2) (2.0) (1.2) (1.6)
Fair value of the 2010 USD GBP cross
currency floating interest rate swaps(3) (1.9) - (0.8)
Fair value of the 2014 USD GBP cross (3.9) - -
currency fixed interest rate swaps(1)
Fair value of interest rate swaps (2.3) (3.4) (2.7)
--------------------------------------------- --------- --------- -------------
(17.0) (6.6) (10.0)
--------------------------------------------- --------- --------- -------------
(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
Changes to derivative contracts
Other than as described below, 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 101 to 105 in
the group's annual report for the 52 weeks ended 29 September
2013.
2007 Notes / 2007 cross currency interest rate swaps
On 20 February 2014, Britvic plc repaid US$102m and GBP25m of
Notes in the United States private placement market (USPP). These
Notes were repaid using funds received from the issuance of 2014
Notes (see below). The 2007 cross currency interest rate swap
instruments which had been designated as part of a cash flow hedge
relationship against the future cash flows associated with this
maturing portion of the 2007 Notes, also matured on 20 February
2014.
The group continues to have a number of cross currency interest
rate swaps relating to the remaining tranches of the 2007 Notes.
These swaps have the same duration and other critical terms as the
remaining portions of the 2007 Notes and continue to be designated
as part of a cash flow hedge relationship. The relationship has
been assessed as highly effective at 13 April 2014.
2014 Notes / 2014 USD GBP cross currency fixed interest rate
swaps
On 20 February 2014, Britvic plc issued US$114m and GBP35m of
Senior Notes with maturities between 7 and 12 years in the United
States private placement market ('the 2014 Notes'). The proceeds
from the 2014 Notes were principally used to repay amounts due in
relation to the maturity of certain tranches of the 2007 Notes.
The dollar denominated funding has been hedged using
cross-currency interest-rate swaps to meet the group's desired
funding profile and to manage associated foreign currency risk to
the profit and loss account. The cross-currency interest-rate
swaps, which swap interest from fixed US dollar to fixed sterling,
are designated as part of a cash flow hedge relationship with the
future cash flows associated with the 2014 Notes. The fair value of
these instruments at 13 April 2014 can be seen in the table above.
The movement in fair value has been taken to equity.
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
13 April 14 April 29 September
2014 2013 2013
GBPm GBPm GBPm
----------------------------------------- --------- --------- ---------------
Consolidated statement of comprehensive
income
Amounts recycled to the income
statement in respect of cash flow
hedges
Forward currency contracts* (1.0) (0.8) 0.6
2007 cross currency interest rate
swaps** 17.4 (12.5) (0.4)
2010 cross currency interest rate
swaps** 2.4 (3.6) (0.1)
2014 cross currency interest rate 2.7 - -
swaps**
----------------------------------------- --------- --------- ---------------
21.5 (16.9) 0.1
----------------------------------------- --------- --------- ---------------
(Losses)/gains in the period in
respect of cash flow hedges
Forward currency contracts 0.9 4.1 0.1
2007 cross currency interest rate
swaps (18.2) 12.1 (1.6)
2010 cross currency interest rate
swaps (2.0) 3.1 0.1
2014 cross currency interest rate (3.9) - -
swaps
----------------------------------------- --------- --------- ---------------
(23.2) 19.3 (1.4)
----------------------------------------- --------- --------- ---------------
Exchange differences on translation
of foreign operations
Movement on 2009 GBP euro cross
currency interest rate swaps 2.1 (7.9) (5.7)
Movement on 2010 GBP euro cross
currency interest rate swaps (0.4) (3.6) (4.0)
Exchange movements on translation
of foreign operations (2.5) 15.4 9.7
----------------------------------------- --------- --------- ---------------
(0.8) 3.9 -
----------------------------------------- --------- --------- ---------------
* Offsetting amounts recorded
in cost of sales
** Offsetting amounts recorded
in finance costs
14. Fair value
Fair value hierarchy
The group uses the following valuation hierarchy to determine
the carrying value of financial instruments that are measured at
fair value:
Level 1: quoted (unadjusted) prices in active markets for
identical assets or liabilities.
Level 2: other techniques for which all inputs which have a
significant effect on the recorded fair value are observable,
either directly or indirectly.
Level 3: techniques which use inputs which have a significant
effect on the recorded fair value that are not based on observable
market data.
13 April 2014 Assets Liabilities
GBPm GBPm
------------------------------------------------------------- ------ -----------
Level 1 - -
Level 2
* Derivatives used for hedging 50.8 (16.0)
* Financial instruments at fair value through profit or
loss 2.8 (2.4)
Level 3 - -
Total 53.6 (18.4)
------------------------------------------------------------- ------ -----------
Fair values of financial assets and financial liabilities
Non-derivative financial assets are categorised as loans and
receivables as defined in IAS 39 'Financial instruments -
recognition and measurement'. Non-derivative financial liabilities
are carried at amortised cost.
The fair value of derivatives, which are quoted at market price,
has been calculated by discounting the expected future cash flows
using prevailing market yield curves.
The fair value of the current trade and other receivables and
payables approximate to book value.
15. Pensions
At 13 April 2014, the IAS 19 pension surplus in respect of the
group defined benefit pension schemes was GBP3.3m (29 September
2013: net deficit of GBP19.3m). The reduction in the deficit was
predominately driven by additional employer contributions made to
the GB plan of GBP20.0m combined with investment outperformance
over the period of GBP6.8m. Changes to the demographic assumptions
on which the IAS 19 valuation for the GB plan is based also
resulted in a reduction in the deficit, although this was largely
offset by an increase in the deficit due to changes in financial
assumptions.
The defined benefit section of the GB plan was closed to new
members on 1 August 2002, and closed to future accrual for active
members from 10 April 2011, with new members being invited to join
the defined contribution scheme. The actuarial valuation of this
scheme as at 31 March 2013 is currently underway, and will be
completed by 30 June 2014.
16. 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 13 April 2014, the consolidated balance
sheet is showing a net assets position of GBP45.3m. 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
GBP520.2m of long term Private Placement Notes with maturity dates
between 2014 and 2026 and a GBP400.0m bank facility maturing in
March 2016. Details are provided in note 32 of the group's 2013
annual report.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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