Britvic's half-year profits fall 4.9% amid post-Brexit pound collapse
Soft drinks giant Britvic has seen half-year profits slump 4.9%, due to one-off charges and rising cost pressures on the back of the Brexit-hit pound.
The Robinsons squash firm saw pre-tax profits drop to £38.6 million for the 28 weeks to April 16, from £40.6 million during the same period last year.
That is despite an 11.5% rise in revenues of £756.3 million for the period, though when stripped of currency effects that rise was tempered to 3.7%.
Britvic, which also bottles Pepsi in the UK, said in its earning release that the post-Brexit vote collapse of the pound was weighing on the firm.
"In all our markets, we have experienced rising costs from underlying cost inflation and in GB (Great Britain) we have faced the additional burden from the weakening of sterling leading to further cost increases for raw materials we purchase in either euro or US dollar."
The depreciation of the pound has increased supply chain costs for many manufacturers, with the costs of imports rising for UK firms.
Those costs have been passed on to consumers, helping drive the Consumer Price Index (CPI) measure of inflation rise to 2.7% last month, the highest level since September 2013.
Britvic's results were also impacted by a string of one-off charges linked to its restructuring programme, the closure of its Indian operations and the acquisition and integration of Brazilian juice firm Bela Ischia - a 218 million Brazilian real (£54.5 million) deal which was first announced in January.
Those charges, when balanced with fair value and intangible asset gains, resulted in a £7.2 million pre-tax hit for Britvic.
But the company said it is still on track to meet full-year targets, despite the profit dip.
Chief executive Simon Litherand said: "Britvic has delivered a strong first half performance driven by organic revenue growth in all our markets and successful management of input cost inflation.
"We have continued to make progress delivering our strategic priorities and have exciting commercial plans for the second half of the year.
"I am confident that we will deliver full-year performance in line with market expectations."
Britvic shares were up 2.4% in morning trading.
Phil Carroll, an analyst at Shore Capital, said: "Overall, a solid performance from Britvic, in our view, with solid underlying profit growth although there may be some concern around the £15 million of cash exceptionals, mostly relating to business capability programme and the Bela Ischia acquisition.
"That said H2 should benefit from a shorter fix cost base period, the pricing taken in the context of the broader market as competitors follow suit to recover input costs and solid innovations."