Britvic Sees Fiscal Year 2020 Adjusted Profit Above Market Views; Cautions on Fiscal Year 2021 -- Update

--Consensus adjusted earnings before interest and tax for fiscal 2020 are GBP155.3 million.

--Company signed a new and exclusive 20-year franchise bottling deal with PepsiCo Inc.

--All plastic bottles in Great Britain will be made from 100% recycled plastic by the end of 2022

By Ian Walker

Britvic PLC said Tuesday that adjusted profit for fiscal 2020 is expected to be slightly ahead of consensus forecasts after a better-than-expected peak summer period, but cautioned that the reintroduction of lockdown restrictions and continued social-distancing measures will hurt its performance next year.

The U.K. soft-drinks maker--which houses the Fruit Shoot, Robinsons, Tango and J2O brands among its portfolio--added that despite this the board is confident in its long-term prospects, and expects to rebuild investment in 2021.

It said that the company benefited from the limited re-opening of the U.K. hospitality sector since early July and continued strong trading in the at-home channel across its markets.

"Britvic is well-positioned to lead the long-term recovery of the category with a portfolio of market-leading, trusted brands, a track record of operational agility and a dedicated and committed team," the company said.

The company hasn't provided any figures. However, a consensus estimate puts adjusted earnings before interest and tax at 155.3 million pounds ($201.1 million), taken from FactSet and based on four analysts' forecasts, compared with GBP214 million for the year ended Sept. 29, 2019.

Britvic said it expects net debt to be GBP40 million-GBP50 million lower than last year, reflecting a disciplined cash management.

In addition, Britvic said it has signed a new and exclusive 20-year franchise bottling deal with PepsiCo Inc. for the production, distribution marketing and sales of its carbonated soft drink brands--including Pepsi, 7UP and Mountain Dew--in Great Britain.

The company said this new deal extends its relationship with PepsiCo, which started in 1987, to December 2040 and includes the Rockstar energy brand.

In addition, Britvic said that all plastic bottles in Great Britain will be made from 100% recycled plastic by the end of 2022, three years earlier than planned.

"Both Britvic and PepsiCo have sustainability at the heart of their business strategies, and we will continue to work together to deliver on our shared ambition to protect the environment and offer healthier choices in the years ahead," Chief Executive Simon Litherland said.

Shares at 0740 GMT were up 41 pence, or 5.5%, at 791.50 pence. However, they are still down 25% over the past 12 months.

Write to Ian Walker at [e-mail]

(END) Dow Jones Newswires

October 20, 2020 04:21 ET (08:21 GMT)

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