Britvic
plc Interim Results – 15 May 2024
For the six months ended 31 March 2024
‘An excellent first half of the
year, confident of continued sustainable growth’
Group
Financial Headlines:
-
Revenue increased
11.2%1
to £880.3m (reported increased
10.9%)
-
Adjusted EBIT increased
17.7%1
to £100.4m (Actual Exchange Rate
(AER) increased 17.7%), reported EBIT increased
15.2%1
-
Adjusted EBIT margin increased
60bps1
to 11.4% (reported increased
70bps)
-
Profit after tax increased
10.1%1
to £59.9m
-
Adjusted earnings per share of
27.0p, up 18.5%
-
Interim dividend of 9.5p, up
15.9%
-
Adjusted net debt/EBITDA of 2.3x,
up 0.1x due to Brazil acquisition
-
Third share buyback programme
announced today, of up to £75m executed over the next 12
months
Highlights:
-
Strong consumer demand for our
brands with H1 volume +4.4%
-
Robust growth with all three
business units achieving revenue, contribution and margin
expansion
-
Standout growth from Pepsi MAX,
Ballygowan, MiWadi, Fruit Shoot and Lipton
-
Brazil revenue +34.7%, driven by
both core portfolio and recently integrated energy
acquisition
-
New growth spaces revenue
increased +63.5%, led by outstanding Plenish
performance
|
6 months ended
31 March
2024
£m
|
6 months ended
31 March
2023
£m
|
% change
actual exchange
rate (reported)
|
Underlying
% change
constant
exchange rate1
|
Revenue
|
880.3
|
794.0
|
10.9%
|
11.2%
|
Adjusted EBIT
|
100.4
|
85.3
|
17.7%
|
17.7%
|
Adjusted EBIT margin
|
11.4%
|
10.7%
|
70bps
|
60bps
|
Reported EBIT
|
93.1
|
80.7
|
15.3%
|
15.2%
|
Reported EBIT margin
|
10.6%
|
10.2%
|
40bps
|
40bps
|
Profit after tax
|
59.9
|
54.4
|
10.1%
|
10.1%
|
Basic EPS
|
24.1p
|
21.0p
|
14.8%
|
|
Adjusted EPS
|
27.0p
|
22.8p
|
18.5%
|
|
Interim dividend per share
|
9.5p
|
8.2p
|
15.9%
|
|
Adjusted net debt/EBITDA
|
2.3x
|
2.2x
|
(0.1)x
|
|
See glossary on page 14 for definitions of performance
measures and Appendix 1 for reconciliations of non-GAAP
measures
|
1.
Adjusted for
constant currency exchange rates
Simon Litherland, Chief Executive
Officer commented:
“I am delighted with our excellent
first half performance. Revenue growth of 11.2%, underpinned by
volume growth of 4.4%, has translated into adjusted EBIT growth of
17.7% and earnings per share growth of 18.5%. We are also
announcing our third share buyback of £75m over the next 12 months,
reflecting our strong earnings, free cashflow generation, and
positive outlook.
As expected, our market-leading growth
comes from the combination of another strong performance from our
scale family favourite brands, coupled with accelerated growth in
Brazil and across multiple new growth spaces, such as London
Essence, Aqua Libra and Plenish. We have increased the investment
behind our brands by over 38% in the period.
Looking forward, I am confident that we
will deliver a strong full year performance. In the medium term, I
firmly believe the continued execution of our strategy and growth
drivers will allow us to sustainably outperform both the market and
our historical top-line growth rate, leaving the
company poised to continue our long-standing track record
of delivering outstanding returns for our shareholders.”
For further information please
contact:
Investors:
|
|
Rebecca Napier (Chief Financial Officer)
Steve Nightingale (Director of Investor Relations)
|
+44 (0) 1442 284330
+44 (0) 7808 097 784
|
Media:
|
|
Stephanie
Macduff-Duncan (Head of Corporate Communications)
|
+44 (0) 7808 097 680
|
Stephen Malthouse (Headland)
|
+44 (0) 7734 956 201
|
There will be a webcast of the presentation given today at
09:00am by Simon Litherland (Chief Executive Officer)
and Rebecca Napier (Chief Financial Officer). The webcast will be
available at www.britvic.com/investors with a transcript available
in due course. To ask a question on the webcast, please dial +44
(0) 808 109 0700 or +44 (0) 33 0551 0200 and quote Britvic Interim
Results when prompted by the operator.
Next
scheduled announcement
Britvic will publish its Q3 trading statement on 25 July
2024.
Note to
editors
About Britvic
Britvic is an international soft drinks
business rich in history and heritage. Founded in England in the
1930s, it has grown into a global organisation with 39 much-loved
brands sold in over 100 countries.
The company combines its own leading
brand portfolio including Fruit Shoot, Robinsons, Tango, J2O,
London Essence, Teisseire, Plenish, Jimmy’s Iced Coffee and MiWadi
with PepsiCo brands such as Pepsi, 7UP and Lipton Ice Tea which
Britvic produces and sells in Great Britain and Ireland under
exclusive PepsiCo agreements.
Britvic is the largest supplier of
branded still soft drinks in Great Britain and the number two
supplier of branded carbonated soft drinks in Great Britain.
Britvic is an industry leader in the island of Ireland with brands
such as MiWadi and Ballygowan, in France with brands such as
Teisseire, Pressade and Moulin de Valdonne and in its growth
market, Brazil, with Maguary, Bela Ischia and Dafruta. Britvic is
growing its reach into other territories through franchising,
export and licensing.
Britvic is listed on the London Stock
Exchange under the code BVIC and is a constituent of the FTSE 250
index.
Find out more at Britvic.com
Cautionary note regarding
forward-looking statements
This announcement includes statements that are
forward-looking in nature. Forward-looking statements involve known
and unknown risks and uncertainties 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. This announcement contains inside
information related to a share buyback programme. The person
responsible for making this announcement is Mollie Stoker, Company
Secretary.
Alternative performance
measures
The annual financial statements of the Group are prepared in
accordance with UK-adopted International Financial Reporting
Standards (IFRS). The condensed set of financial statements
included in this interim results announcement has been prepared in
accordance with UK-adopted IAS 34 ‘Interim Financial Reporting’. We
use certain non-IFRS alternative performance measures to provide
additional information about the Group’s performance. Non-IFRS
measures may be considered in addition to, but not as a substitute
for or superior to, information presented in accordance with IFRS
and are also used internally to measure and manage the business.
Non-IFRS measures are defined in the glossary on page 14 and
reconciled to the nearest IFRS measure in Appendix 1.
Market data
GB, ROI and French take-home market data referred to in this
announcement is supplied by Nielsen and runs to 30 March
2024.
Chief
Executive Officer’s Review
Today, we report an excellent performance for the six months
to 31 March 2024. It is gratifying to see the careful planning,
targeted investment, considered decision-making and sheer hard work
of the whole Britvic team over the last few years all starting to
shine through in material outperformance and tangible progress
against our strategic priorities. After two years of elevated cost
pressure across the business, inflation has begun to ease this
year. Throughout this time, soft drinks and in particular,
Britvic’s broad range of much-loved brands, has continued to offer
consumers great products at affordable value.
I am delighted to share that we have achieved robust volume
growth this half. In the first quarter, our volume increased by
1.7%, and in the second quarter it accelerated to an impressive
7.4%, resulting in a first-half volume growth of 4.4%. When coupled
with positive price/mix, this has led to revenue and adjusted EBIT
significantly ahead of last year, growing +11.2% (+10.9% on a
reported basis) and +17.7% (AER +17.7%) respectively, on a constant
currency basis. Alongside these excellent results, we have stepped
up our investment in the business, with a 38.9% increase in A&P
spend.
In our 2023 preliminary results and strategy presentation, we
shared a framework of where we believe our future growth will come
from. The particular opportunities we highlighted were:
-
Outperforming the market with our
broad portfolio of family favourite brands
-
Double-digit growth in
Brazil
-
Strong double-digit growth in new
growth spaces such as Plenish, Aqua Libra and London
Essence
-
Underpinned by underlying
category volume growth and price/mix
In the first half, we have made excellent progress against
these opportunities, with revenues growing across our portfolio of
family favourite brands by +7.0%, Brazil by +34.7% and new growth
spaces by +63.5%.
A growth
strategy
With a portfolio of market-leading brands, multi-channel
routes to market, collaborative customer relationships and a
well-invested supply chain, we set out our strategic framework as
follows:
Our future focus remains on four key
strategic priorities:
-
Build local favourites and global
premium brands
-
Flavour billions of water
occasions
-
Healthier People, Healthier
Planet
-
Access new growth
spaces
Each of our markets has a defined
role to play:
-
GB – to lead market
growth
-
Brazil – to accelerate growth and
expand our presence
-
Other International – to
globalise premium brands and improve profitability in Western
Europe
Underpinning this strategy are three
critical enablers:
-
Generate fuel for growth through
efficiency
-
Transform organisational
capability and culture
-
Selective M&A to accelerate
growth
Market
review
Great Britain
In GB, we have delivered a strong performance, with volume
increasing by 2.6% and revenue by 8.8%, and importantly revenue
growing in both retail (+9.6%) and hospitality (+5.6%).
Last year, we installed another can line to meet the
expanding demand for family favourite brands such as Tango and
Pepsi MAX, and to enable us to launch a can format for Lipton Ice
Tea. Pepsi MAX has continued to lead the cola category growth
through both the core MAX proposition and our range of appealing
flavours. This spring featured the unmissable global brand refresh
of Pepsi, supported by a significant increase in investment. The
refresh was supported in GB by a nationwide 360 degree marketing
campaign, including billboards, digital takeovers, in-store
activation, a new bold TV advertisement and engaging social media
content. Launching a can format for Lipton Ice Tea has accelerated
the brand's progress this year, with substantial volume growth
underpinning a 27.6% increase in revenue.
Fruit Shoot has also delivered excellent revenue growth,
through compelling consumer marketing activation at key events such
as Christmas and Halloween, including a partnership with Great
Ormond Street Hospital. We have also executed a digital engagement
programme which encourages children to be active and engaged in the
things they enjoy.
In our new growth spaces, London Essence continued to
progress in the first half. In the GB hospitality sector, it is the
only mixer in growth, and new account wins include the Silverstone
racetrack, The Belfry Hotel & Golf Resort and Turtle Bay
Restaurants. In the retail channel, we continue to build momentum
as the fastest-growing mixer in the category, with Retail Sales
Value (RSV) increasing +28% this half. New listings have also
increased retail distribution by 36% since September.
Last summer, we acquired Jimmy's Iced Coffee to access the
fast-growing ready-to-drink (RTD) iced coffee category. Jimmy's is
a great-tasting product with less sugar than the category leaders.
We see an excellent opportunity to leverage Britvic's capability to
accelerate Jimmy's growth. While we have only owned the business
for less than a year, we have already had an impact by securing new
listings, launching new pack formats and collaborating with
Myprotein to launch a protein-focused variant. We are also working
to utilise our supply chain and procurement capabilities to realise
cost savings.
Plenish has had a truly outstanding half, with revenue up
168.5%, demonstrating Britvic’s acceleration of an already powerful
consumer brand. Our product innovation team successfully completed
at the start of the year the extremely technically challenging
creation of a Barista range of Plenish organic plant-based milks,
developing the only range in the UK free from oils and gums, while
still offering creaminess, foam, and flavour. Our whole organic
plant-based milk range has strong growth momentum, becoming the
number 3 brand, with retail sales value increasing 75% in the most
recent market data. The performance of the health shot range, such
as ginger and turmeric, has been equally impressive as we have
expanded distribution across Grocery, tripling the RSV and leading
to the status of number 2 market position and fastest growing
brand. Again, we have applied our expertise to support the launch
of new variants, such as green juices and a larger pack format for
dosing.
Aqua Libra has also delivered excellent growth, with combined
revenue from our packaged and tap products increasing 35.3%.
Earlier this year, we launched still and sparking water in cans,
complementing the existing infused water range. Taps continue to
make excellent progress, expanding distribution across its three
different offerings of table bottling for hospitality,
still/sparkling/hot taps primarily for workplace, and our
innovative flavour tap.
Brazil
In the first half of the year, we delivered an outstanding
performance, with revenue growth of 34.7%. Our existing brands have
achieved double digit growth across the portfolio, with all of
concentrates, ready-to-drink juices, tea, grape and Fruit Shoot
performing strongly. A combination of factors underpinned the
growth. We have had a real focus on perfect store execution,
increasing the merchandising team headcount by 39% this year to
ensure we execute great in-store feature and display. We have also
focused efforts to win in the stores close to our factories, to
optimise supply chain cost to serve and realise margin
benefits.
At the start of the financial year, we completed the
acquisition of Extra Power and three supporting brands. The
acquisition gave us immediate access to the higher-margin energy
category and a more significant presence in the centre-west region.
The integration was successfully completed earlier this year, and
we are already realising the cost synergies and commercial benefits
that we anticipated.
A&P spend is a much smaller part of the operating model
in Brazil than it is in our European businesses, but we have
started to increase investment behind our key brands. Activity has
included a "Back to School" campaign for Fruit Shoot, Carnival
sponsorship in Rio de Janeiro, music events with Extra Power and
building trial and awareness of Natural Tea through targeted
activities.
Other International
Performance in Ireland remained robust, with revenue up 8%.
Both price realisation and mix offset a modest volume decline in
the half. February saw the launch of the Deposit Return Scheme
(DRS) for PET bottles and cans, known to the public as Re-turn, in
the Republic of Ireland. To date, return rates for the scheme are
ahead of where they were for launches in similar-sized European
countries. As expected, the launch has had a small impact on
volumes, though it is still too early to evaluate the full impact
and in other markets this has normalised over time.
At the end of 2023, we completed a supply chain programme to
release additional production capacity in the Irish factories, by
introducing new work rosters, while simultaneously implementing
cost-efficiency savings within the manufacturing and warehouse
operations. This has enabled us to
successfully reduce the cost and complexity created by introducing
DRS. In the second half, we will prepare our PET lines for Tethered
Caps, an EU legislation that will be enacted in July 2024, and
expand our production capacity for the fast-growing Ballygowan Hint
of Fruit flavoured variant.
In France, performance significantly improved in the second
quarter. Our branded syrup, Teisseire, has continued to face
significant competition from private label alternatives, where
retailers have chosen to hold pricing, exacerbating the price gap.
A large part of our growth this year has come from manufacturing
private label for our retail partners, though this is negative for
mix. At the same time, the pure juice category has remained
challenging for Pressade. Both Fruit Shoot and Moulin de Valdonne
delivered excellent growth in the first half, with volume
increasing and strong price/mix, realising double-digit revenue
growth. Teisseire will be supported by a strong marketing and
promotional activity programme in the second half, including TV,
internet, social media and sponsorships, such as the women's Tour
de France.
Healthier People, Healthier
Planet
Our sustainability strategy, Healthier People, Healthier
Planet, is a central and integrated part of our business. We have
continued to invest in our team's personal development by launching
new online learning tools, while also investing in expanded
graduate and apprenticeship schemes across the business to develop
the next generation. Our active equity, diversity and inclusion
programme continues, ably stewarded by our employee-led network
groups. We have huge focus on the wellbeing of our people, with an
innovative example this year being our partnership with
award-winning sleep-science experience the Night Club, who will be
helping our shift workers across the supply chain to be happier and
healthier at home and work. Our teams use an increasing number of
volunteering days to support good causes in their local
communities.
From a Healthier Planet perspective, we have signed a power
purchase agreement (PPA) to deliver clean energy. We can proudly
say that 75% of the National Grid electricity used to make our
brands in Great Britain comes from the sun, thanks to a vast
160-acre solar farm in Northamptonshire. As mentioned above, in the
Republic of Ireland, a deposit return scheme (DRS) was introduced
in February. With EU recycling targets at 77% by 2025 and 90% by
2029, the deposit return scheme marks a step change in driving
consumer behaviour to boost recycling rates, tackle litter and
create a circular economy. Britvic was a founding member and
guiding voice in the introduction and administration of the scheme.
At our Beckton site, the heat recovery system we announced last
year is now fully operational, and we anticipate a 50% reduction in
the site's carbon emissions. At our Rugby site, we have invested in
new systems for our water processing plant, which means we can
treat double the water used each hour and reduce the associated
energy consumption by 60%.
Outlook
Britvic is a growing, resilient, well-invested and dynamic
business, with much-loved brands and a team of highly engaged and
talented people. I am delighted with our first half performance and
the brand momentum we are carrying forward into the second half.
Trading in April is in line with our expectations, and we have very
strong plans for the balance of the year. Across our markets, we
have a compelling and wide-ranging programme of consumer engagement
and retail activation, including the Champions League final in
London, headlining music festival sponsorships, the women’s Tour De
France, and sponsorship of The Hundred Cricket. Consumers will also
start to enjoy new flavours and innovations from their favourite
brands.
Notwithstanding economic and political uncertainties, I am
confident that, as we head into the critical summer trading period
for our European markets, we will deliver a strong full year
performance.
Looking to the medium term, we
are confident in our strategy and that the accelerators within our
growth algorithm will position us to sustainably outperform both
the market and our historical top-line growth rate, leaving the
company poised to continue our
long-standing track record of delivering market-beating returns for
our shareholders.
Financial
Review
Overview
We have delivered a strong start to the year, with revenue,
adjusted EBIT margin, and adjusted EBIT ahead of last year. Group
revenue increased 11.2% year-on-year on a constant currency basis
(reported +10.9%), including a sequential improvement, with quarter
one revenue increasing 8.1% and second quarter revenue increasing
14.5% on last year. Similarly, volume in quarter one increased
1.7%, and 7.4% in quarter two. Profit after tax increased 10.1% to
£59.9m.
We have successfully executed pricing plans in each of our
markets in the first half, through a combination of base price,
pack mix and promotional optimisation.
Adjusted EBIT, on a constant currency basis, increased 17.7%
(AER +17.7%) to £100.4m, resulting in an adjusted EBIT margin of
11.4%, a 60bps improvement on last year (AER +70bps). The increase
in adjusted EBIT margin was achieved while A&P increased by
over 38% on last year. Adjusted EPS increased 18.5% year-on-year.
The interim dividend equates to 9.5p per share, a year-on-year
increase of 15.9%, reflecting multiple factors including the
accelerated profit delivery in the first half. We remain committed
to a 50% dividend pay-out policy.
In the first half we have maintained debt leverage broadly
flat on last year, while completing the acquisition of Extra Power
in Brazil. In addition, we have paid dividends of £55.8m and
completed the share buyback programme we announced last May, with
£37.6m repurchased this financial year. Our confidence in the
prospects of the business and cash generation has resulted in the
Board’s decision to confirm a further share buyback programme of
£75m over the next 12 months, subject to market conditions and
other uses of capital.
Below is a summary of the segmental performance and
explanatory notes related to items, including taxation, finance
costs, and free cash flow generation.
GB
|
6 months ended
31 March 2024
|
6 months ended
31 March 2023
|
% change
actual
exchange rate
|
Volume (million
litres)
|
841.9
|
820.7
|
2.6%
|
ARP per
litre
|
70.3p
|
66.3p
|
6.0%
|
Revenue
(£m)
|
592.2
|
544.2
|
8.8%
|
Brand
contribution (£m)
|
248.0
|
218.6
|
13.4%
|
Brand
contribution margin
|
41.9%
|
40.2%
|
170bps
|
See glossary on page 14 for definitions of performance
measures.
In GB, we have delivered strong revenue growth, 8.8% ahead of
last year, with both the retail and hospitality channels generating
revenue growth. Volume grew 2.6%, with 5.0% growth in the second
quarter. Average Realised Price (ARP) growth of 6.0% was driven
through a combination of improved mix, price realisation and
optimising promotional activity. Pepsi was a key driver of growth,
with revenue increasing 8.5%, benefiting from the brand refresh
investment in March and growth in cans, enabled by additional
capacity to meet growing consumer demand. Other growth highlights
include Tango, J2O, Fruit Shoot and Lipton. Robinsons performance
was stable compared to last year, while Rockstar continued to be
challenging. We continued to focus on new growth spaces: Plenish
and Aqua Libra generated growth of 169% and 34% respectively and we
also benefited from the inclusion of Jimmy’s Iced coffee, which was
acquired last summer.
Brazil
|
6 months ended
31 March 2024
|
6 months ended
31 March 2023
|
% change
actual
exchange rate
|
% change
like-for-like
at constant
exchange rate
|
Volume (million
litres)
|
175.3
|
143.4
|
22.3%
|
22.3%
|
ARP per
litre
|
58.2p
|
52.8p
|
10.2%
|
10.2%
|
Revenue
(£m)
|
102.0
|
75.7
|
34.7%
|
34.7%
|
Brand
contribution (£m)
|
27.3
|
18.2
|
50.0%
|
50.0%
|
Brand
contribution margin
|
26.8%
|
24.0%
|
280bps
|
280bps
|
In Brazil, revenue increased 34.7%, with volume up 22.3%,
benefiting from strong growth in the existing brands as well as the
acquisition of Extra Power last October. Growth was achieved across
the portfolio, with concentrates and Fruit Shoot particularly
strong, increasing revenue by 22.3% and 39.5% respectively. The
acquisition is now fully integrated and realising both cost
synergies and commercial benefits. This strong performance
translated into combined brand contribution increasing 50.0% and
margins expanding by 280bps to 26.8%, inclusive of the
acquisition.
Other
International
|
6 months ended
31 March 2024
|
6 months ended
31 March 2023
|
% change
actual
exchange rate
|
% change
like-for-like
at constant
exchange rate
|
Volume (million
litres)
|
187.5
|
190.0
|
(1.3)%
|
(1.3)%
|
ARP per
litre
|
99.2p
|
91.6p
|
8.3%
|
9.6%
|
Revenue
(£m)
|
186.1
|
174.1
|
6.9%
|
8.2%
|
Brand
contribution (£m)
|
47.0
|
42.7
|
10.1%
|
11.4%
|
Brand
contribution margin
|
25.3%
|
24.5%
|
80bps
|
80bps
|
Note: Other International consists of France, Ireland and
other international markets. Concentrate sales are included in both
revenue and ARP but do not have any associated volume.
In Other International, volume declined 1.3%, revenue
increased 8.2%, and brand contribution increased 11.4%. In Ireland,
the deposit return scheme launch in February resulted in second
quarter volume decline, as we anticipated, as retailers de-stocked
ahead of the launch. We are pleased with our brand performance, in
particular Pepsi grew volume and revenue, benefiting from the brand
refresh. Likewise, Ballygowan and MiWadi delivered a strong first
half performance.
In France, Teisseire continued to be adversely impacted by
price competition from private label. The brand decline was partly
offset by supply of retailer own-brand syrups. Similarly, Pressade
performance was challenging. Both Fruit Shoot and Moulin De
Valdonne had a strong first half, with revenue increasing 21.1% and
23.4% respectively.
In our wider international markets, Mathieu Teisseire had a
very strong first half, with revenue increasing 70.8%.
Fixed costs –
pre-adjusting items
|
6 months ended
31 March 2024
£m
|
6 months ended
31 March 2023
£m
|
% change
actual
exchange rate
|
% change
like-for-like
at constant
exchange rate
|
Non-brand
A&P
|
(5.6)
|
(6.0)
|
6.7%
|
6.7%
|
Fixed supply
chain
|
(81.1)
|
(70.2)
|
(15.5)%
|
(15.9)%
|
Selling
costs
|
(50.6)
|
(45.3)
|
(11.7)%
|
(12.2)%
|
Overheads and
other
|
(84.6)
|
(72.8)
|
(16.2)%
|
(16.5)%
|
Total
|
(221.9)
|
(194.3)
|
(14.2)%
|
(14.6)%
|
|
|
|
|
|
Total A&P investment
|
(30.2)
|
(21.8)
|
(38.5)%
|
(38.9)%
|
A&P as a % of own brand
revenue
|
3.4%
|
2.7%
|
|
|
Overall, our fixed cost base increased 14.6% on a
like-for-like basis. Total A&P was £8.4m higher than last year,
an increase of 38.9%. During the period we increased production
capacity, adding a new can line in GB and additional capacity in
Brazil. We invested in additional resource for the
field sales team to support our channel growth strategy. Our people
costs have also increased, reflecting both changes to headcount and
salary investment to retain and recruit the best talent. We adopted
a tiered approach to ensure those on lower salaries received a
higher percentage salary increase, in recognition of the increased
cost of living.
Finance
costs
The net finance charge for the period ended 31 March 2024 was
£14.9m, compared with £11.4m in the comparative period, primarily
due to the higher cost of borrowing on floating rate debt and a
higher level of net debt, following recent acquisitions.
Adjusting
items – pre-tax
In the period, the Group incurred, and has separately
disclosed, a net charge of £7.8m (6 months ended 31 March 2023:
£4.6m) of pre-tax adjusting items. Adjusting items
comprised:
-
strategic restructuring and
M&A costs of £3.9m including costs related to Norwich,
strategic reviews and strategic M&A costs in relation to the
acquisition in Brazil,
-
Ireland Deposit Return Scheme set
up costs of £1.2m,
-
Ballygowan trademark impairment
reversal credit of £3.6m,
-
finance costs arising from the
unwind of discount on deferred consideration for Brazil
acquisition, and
-
recurring acquisition-related
amortisation of £5.8m.
Taxation
The adjusted tax charge for the period was £19.0m (6 months
ended 31 March 2023: £15.0m), which equates to an adjusted
effective tax rate of 23.7% (6 months ended 31 March 2023: 21.5%).
This increase in the effective tax rate is mainly due to the
increase in the UK tax rate to 25%. The reported net tax charge was
£18.3m (6 months ended 31 March 2023: £14.9m), which equates to an
effective tax rate of 23.4% (6 months ended 31 March 2023:
21.5%).
Earnings
per share (EPS)
Adjusted basic EPS for the period was 27.0 pence, an increase
of 18.5% (at actual exchange rates) on the prior year, due to
higher operating profits in the half and the impact of a lower
number of shares in issue because of the share buyback. Adjusted
diluted EPS improved 18.6%. Basic EPS for the period was 24.1
pence, an increase of 14.8% on last year. Diluted EPS for the
period was 23.9 pence, an increase of 14.4% on the same period last
year.
Dividends
The Board is proposing an interim dividend of 9.5p per share,
with a total value of £23.6m. The interim dividend for 2024 will be
paid on 5 July 2024 to shareholders on record as of 31 May 2024.
The ex-dividend date is 30 May 2024.
Share
buyback programme
On 24 May 2023, the Company commenced a share buyback
programme (the Programme) to repurchase ordinary shares with a
market value of up to £75.0m. The purpose of the Programme was to
reduce the Company’s share capital and therefore the shares
purchased pursuant to the Programme were subsequently
cancelled.
During the six months ended 31 March 2024, the Company
completed the Programme, purchasing 4,478,603 ordinary shares at an
average price of 838.9p per share and an aggregate cost of £37.8m,
including £0.2m of transaction costs. In aggregate under the
Programme, 8,806,567 shares were repurchased at an average price of
851.7p and at a total cost of £75.0m, including £0.5m of
transaction costs.
Free cash
flow
Free cash flow (defined as cash generated from operating
activities, plus proceeds from sale of property, plant and
equipment, less capital expenditure, interest and repayment of
lease liabilities) was an outflow of £27.9m, compared with an
outflow of £9.0m in the 6 months ended 31 March 2023.
Cash generated from operating activities before changes in
working capital and income tax paid was £129.1m compared with
£110.6m in the comparative period, reflecting an improved operating
performance and continued disciplined cash management during the
half year.
This half year there was a working capital outflow of £92.6m
(6 months ended 31 March 2023: £65.3m outflow), comprising an
outflow from increases in inventory of £5.5m (6 months ended 31
March 2023: £48.8m outflow), an outflow from increases in trade and
other receivables of £15.1m (6 months ended 31 March 2023: £43.2m
inflow), an outflow from decreases in trade and other payables of
£71.5m (6 months ended 31 March 2023: £58.9m outflow) and an
outflow from decreases in provisions of £0.5m (6 months ended 31
March 2023: £0.8m outflow).
Net income taxes paid were £11.7m (6 months ended 31 March
2023: £9.6m).
Cash capital expenditure increased slightly from £29.4m
during the 6 months ended 31 March 2023 to £32.9m for the current
half year, reflecting our continued investment. Lease payments
decreased from £6.0m to £5.1m.
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, foreign exchange rates and commodities, while
managing the Group’s debt and liquidity profile. The Group uses
financial instruments to hedge against interest rate and foreign
currency exposures as well as commodity exposures, including
aluminium, sugar, gas, power, diesel and certain packaging
components.
In February 2024, private placement notes with principal
amounts of US$39.0m and £15.0m reached maturity, resulting in a
cash outflow of £39.2m, net of the impact of
derivatives.
In March 2024, the Group issued £150.0m of new private
placement notes, which have maturities ranging from 5 to 10 years
and bear interest at fixed rates.
On 31 March 2024, the Group had £1,042.1m of committed debt
facilities, consisting of a £400.0m bank facility and a series of
private placement notes, with maturities between February 2025 and
May 2035. £56.2m was drawn under the bank facility at 31 March
2024. £366.7m of the bank facility matures in February 2027 and the
remaining £33.3m will mature in February 2025. The next maturity
for the company’s private placement notes is in February 2025, when
notes with outstanding principal amounts of £35.0m will be due for
repayment.
On 31 March 2024, the Group’s adjusted net debt, including
the impact of interest rate currency swaps hedging the balance
sheet value of the private placement notes, was £694.0m, which
compares with £538.1m at 30 September 2023. The increase in net
debt reflects the seasonality of the business, where profits and
operating cash flow are higher in the second half of the year, and
that during the first half of the year the Group paid £24.1m in
relation to the acquisition in Brazil, paid dividends of £55.8m and
purchased own shares of £52.7m.
Excluding derivative hedges, adjusted net debt was £706.8m,
comprising £654.9m of private placement notes, £56.2m of borrowings
under the bank facility, £4.8m of accrued interest, offset by net
cash, deposits and overdrafts of £6.7m and unamortised debt issue
costs of £2.4m. Adjusted net debt
to EBITDA leverage at 31 March 2024 was 2.3x, slightly up on the
leverage of 2.2x at 31 March 2023.
Acquisitions
At the start of the half year, the Group completed an
acquisition in Brazil, which includes the Extra Power and Flying
Horse energy drink brands, juice brand Juxx and acai smoothie brand
Amazoo. The consideration for the acquisition includes initial cash
consideration of £24.1m (net of derivatives hedging the
acquisition) as well as deferred and contingent consideration, as
set out further in Note 19 to the financial statements.
Pensions
At 31 March 2024, Britvic plc had IAS 19 defined benefit
pension surpluses in GB and ROI totalling £61.9m and an IAS 19
pension deficit in France of £1.6m (30 September 2023: pension
surpluses in GB, ROI and NI of £74.0m and a pension deficits in
France of £1.4m). The decrease in the net pension assets is
primarily attributable to a net remeasurement loss of £19.2m, of
which £12.5m relates to the GB scheme and £6.4m relates to a change
in the asset ceiling for the NI scheme that resulted in the
derecognition of its net surplus.
The net income for defined benefit schemes recognised in the
income statement for the 6 months ended 31 March 2024 was £1.6m (6
months ended 31 March 2023: net income of £3.2m).
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 1 April 2011, with new employees being invited to join
the defined contribution scheme. The Northern Ireland scheme was
closed to new members on 28 February 2006 and future accrual from
31 December 2018, and new employees are eligible to join the
defined contribution scheme. All new employees in Ireland join the
defined contribution plan. Contributions are paid into the defined
benefit section of the GB plan as determined by the trustee, agreed
by the company and certified by an independent actuary in the
schedule of contributions. No further deficit funding payments are
due to be paid except for the £5.0m annual partnership payment
which will continue until 2025.
Risk
management process
As with any business, Britvic faces risks and uncertainties.
We believe that effective risk management supports the successful
delivery of our strategic objectives. The management of these risks
is based on a balance of risk and reward, determined through
assessment of the likelihood and impact, as well as the Group’s
risk appetite. The Executive team performs a formal robust
assessment of the principal risks facing the Group bi-annually,
which is reviewed by the Board. Similarly, all business units and
functions perform formal risk assessments that consider the Group’s
principal risks and specific local risks relevant to the market in
which they operate.
Risks are monitored throughout the year with consideration
given to internal and external factors and the Group’s risk
appetite. We continue to further refine and embed our risk
management approach across the breadth of the organisation,
focussing on driving the effectiveness of the risk management
framework across the organisation. Updates to risks and mitigation
plans are managed agilely, with changes made as required. In
response to the volatile and uncertain external environment, the
risk team has continued to support each of our markets and
functions in identifying and managing existing and emerging risks
to the organisation.
The principal risks and uncertainties facing the Group are
set out on pages 75 to 80 of the Britvic Annual Report and Accounts
2023. These principal risks and uncertainties include: consumer
preference, health concerns, retailer landscape and customer
relationships, supply chain, sustainability and environment,
market, quality of our products and the health and safety of our
people, legal and regulatory, technology and information security,
treasury, tax and pensions, and talent.
The nature and potential impact of the principal risks and
uncertainties facing Britvic did not change in the six months ended
31 March 2024 and are not expected to change during the second half
of the financial year.
Glossary
A&P is a measure of
marketing spend including marketing, research and
advertising.
Acquisition-related
amortisation is the amortisation of intangibles
recognised as part of a business combination.
Adjusted earnings per share
(Adjusted EPS) is a non-GAAP measure calculated by
dividing adjusted earnings by the average number of shares during
the year. Adjusted earnings is defined as the profit/(loss)
attributable to ordinary equity shareholders before adjusting
items. Average number of shares during the year 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.
Adjusted effective tax rate
is a non-GAAP measure and is defined as the income tax
charge(credit), excluding the tax effect of Adjusting items, as a
proportion of the Adjusted profit before tax.
Adjusted EBIT is a
non-GAAP measure and is defined as operating profit before
adjusting items.
Adjusted EBIT margin is
a non-GAAP measure and is defined as Adjusted EBIT as a proportion
of Revenue.
Adjusted EBITDA is a
non-GAAP measure calculated by taking Adjusted EBIT and adding back
depreciation, amortisation and loss on disposal of property, plant
and equipment and deducting payments of lease liabilities as an
estimate for pre-IFRS16 rental charges.
Adjusted net debt is a
non-GAAP measure and is defined as net debt, adding back the impact
of derivatives hedging the balance sheet debt.
Adjusted net debt/EBITDA
is a non-GAAP measure and is defined as the ratio of Adjusted
net debt to Adjusted EBITDA (calculated for the preceding 12
months).
Adjusted profit before tax
is a non-GAAP measure and is defined as profit before tax,
excluding Adjusting items, with the exception of
acquisition-related amortisation.
Adjusting items are
those items of income and expense set out in Appendix 1 that have
been identified because of their size, frequency and nature to
provide shareholders with management’s view of the underlying
financial performance in the period.
AER are changes in
measures at actual exchange rates.
ARP is average realised
price defined as average revenue per litre sold, excluding factored
brands and concentrate sales.
Bps
is basis points
and is a measure used to describe the percentage change in a value.
One basis point is equivalent to 0.01%.
Brand contribution is a
non-GAAP measure and 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. Brand contribution is
reconciled to profit before tax in note 6 of the interim financial
statements.
Brand contribution margin
is a non-GAAP measure and is a percentage measure calculated
as brand contribution divided by revenue. Each business unit’s
performance is reported down to the brand contribution
level.
Constant exchange rate
is a non-GAAP measure of performance in the underlying
currency to eliminate the impact of foreign exchange
movements.
EPS
is Earnings Per
Share.
FMCG
is Fast Moving
Consumer Goods.
Free cash
flow is a
non-GAAP measure and is defined as cash generated from operating
activities, plus proceeds from the sale of property, plant and
equipment, less capital expenditure, interest and repayment of
lease liabilities.
GB is Great
Britain.
GCB GlobalBev Comércio
de Bebidas Ltda
Group is Britvic plc,
together with its subsidiaries.
Immediate Consumption
is defined as pack formats to be consumed on
purchase, rather than deferred packs which are purchased and
consumed later.
Innovation is defined
as new launches over the last five years, excluding new flavours
and pack sizes of established brands.
M&A
is mergers and
acquisitions.
Net
debt is
the sum of interest-bearing loans and borrowings, overdrafts and
cash and cash equivalents.
NI
is Northern
Ireland.
Non-GAAP
measures are
provided because they are closely tracked by management to evaluate
Britvic’s operating performance and to make financial, strategic
and operating decisions.
Operating profit margin
is operating
profit as a proportion of revenue, both as reported in the
consolidated income statement.
PET is
polyethylene terephthalate plastic.
RCF is revolving
credit facility.
Revenue is defined as
sales achieved by the Group net of price promotional investment and
retailer discounts.
ROI
is Republic of
Ireland.
rPET
is recycled
polyethylene terephthalate plastic.
RTD is
ready-to-drink.
RSV is Retail Sales
Value
Volume is defined as
number of litres sold. No volume is recorded in respect of
international concentrate sales or Brazil fruit pulp
sales.
BRITVIC
PLC
RESPONSIBILITY
AND CAUTIONARY STATEMENTS
Company number: 5604923
RESPONSIBILITY
STATEMENT
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 United Kingdom adopted International Accounting
Standard 34 ‘Interim Financial Reporting’ and that the interim
management report herein includes a fair review of the information
required by DTR 4.2.7R (indication of important events and their
impact during the first six months and description of principal
risks and uncertainties for the remaining six months of the year)
and DTR 4.2.8R (disclosure of related parties’ transactions and
changes therein).
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 six months
to 31 March 2024. This report contains forward-looking statements
made in good faith 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:
Ian Durant
Simon Litherland
Rebecca Napier
William Eccleshare
Emer Finnan
Georgina Harvey
Hounaïda Lasry
Romeo Lacerda
By order of the Board,
Simon Litherland
Chief Executive Officer
Date: 14 May 2024
Rebecca Napier
Chief Financial Officer
Date: 14 May 2024
INDEPENDENT
REVIEW REPORT TO BRITVIC PLC
Conclusion
We have been engaged by the company
to review the condensed set of financial statements in the
half-yearly financial report for the six months ended 31 March 2024
which comprises the Condensed Consolidated Income Statement, the
Condensed Consolidated Statement of Comprehensive Income, the
Condensed Consolidated Statement of Changes in Equity, the
Condensed Consolidated Balance Sheet, the Condensed Consolidated
Statement of Cash Flows, and related notes 1 to 20.
Based on our review, nothing has
come to our attention that causes us to believe that the condensed
set of financial statements in the half-yearly financial report for
the six months ended 31 March 2024 is not prepared, in all material
respects, in accordance with United Kingdom adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency
Rules of the United Kingdom’s Financial Conduct
Authority.
Basis for
Conclusion
We conducted our review in
accordance with International Standard on Review Engagements (UK)
2410 “Review of Interim Financial Information Performed by the
Independent Auditor of the Entity” issued by the Financial
Reporting Council for use in the United Kingdom (ISRE (UK) 2410). A
review of interim financial information consists of making
inquiries, 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 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.
As disclosed in Note 2, the annual
financial statements of the group are prepared in accordance with
United Kingdom adopted international accounting standards. The
condensed set of financial statements included in this half-yearly
financial report has been prepared in accordance with United
Kingdom adopted International Accounting Standard 34, “Interim
Financial Reporting”.
Conclusion
Relating to Going Concern
Based on our review procedures,
which are less extensive than those performed in an audit as
described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors
have inappropriately adopted the going concern basis of accounting
or that the directors have identified material uncertainties
relating to going concern that are not appropriately
disclosed.
This Conclusion is based on the
review procedures performed in accordance with ISRE (UK) 2410;
however future events or conditions may cause the entity to cease
to continue as a going concern.
Responsibilities
of the Directors
The directors are responsible for
preparing the half-yearly financial report in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom’s
Financial Conduct Authority.
In preparing the half-yearly
financial report, the directors are responsible for assessing the
group’s ability to continue as a going concern, disclosing as
applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s
Responsibilities for the review of the financial
information
In reviewing the half-yearly
financial report, we are responsible for expressing to the company
a conclusion on the condensed set of financial statements in the
half-yearly financial report. Our Conclusion, including our
Conclusion Relating to Going Concern, are based on procedures that
are less extensive than audit procedures, as described in the Basis
for Conclusion paragraph of this report.
Use of our
report
This report is made solely to the
company in accordance with ISRE (UK) 2410. Our work has been
undertaken so that we might state to the company those matters we
are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company,
for our review work, for this report, or for the conclusions we
have formed.
Deloitte
LLP
Statutory Auditor
London
14 May 2024
BRITVIC
PLC
CONDENSED
consolidated income statement
For the 6 months
ended 31 March 2024
|
|
6 months ended
|
6 months ended
|
12 months ended
|
|
|
31 March 2024
|
31 March 2023
|
30 September 2023
|
|
|
(unaudited)
|
(unaudited)
|
(audited)
|
|
Note
|
£m
|
£m
|
£m
|
Revenue
|
6
|
880.3
|
794.0
|
1,748.6
|
Cost of sales
|
|
(515.9)
|
(487.5)
|
(1,049.1)
|
Gross
profit
|
|
364.4
|
306.5
|
699.5
|
Selling and distribution
expenses
|
|
(149.2)
|
(126.6)
|
(271.1)
|
Administration expenses
|
|
(122.1)
|
(99.2)
|
(246.9)
|
Operating
profit
|
|
93.1
|
80.7
|
181.5
|
Finance income
|
|
2.0
|
0.4
|
1.1
|
Finance costs
|
|
(16.9)
|
(11.8)
|
(25.8)
|
Profit before
tax
|
|
78.2
|
69.3
|
156.8
|
Income tax expense
|
7
|
(18.3)
|
(14.9)
|
(32.8)
|
Profit for the
period attributable to the equity shareholders
|
|
59.9
|
54.4
|
124.0
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
Basic earnings per share
|
8
|
24.1p
|
21.0p
|
48.3p
|
Diluted earnings per
share
|
8
|
23.9p
|
20.9p
|
47.9p
|
BRITVIC
PLC
CONDENSED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME/(EXPENSE)
For the 6 months
ended 31 March 2024
|
|
6 months ended
|
6 months ended
|
12 months ended
|
|
|
31 March 2024
|
31 March 2023
|
30 September 2023
|
|
|
(unaudited)
|
(unaudited)
|
(audited)
|
|
Note
|
£m
|
£m
|
£m
|
Profit for the
period attributable to the equity shareholders
|
|
59.9
|
54.4
|
124.0
|
|
|
|
|
|
Items that will
not be reclassified to profit or loss
|
|
|
|
|
Remeasurement losses on defined
benefit pension schemes
|
15
|
(19.2)
|
(39.0)
|
(55.5)
|
Deferred tax on defined benefit
pension plans
|
|
4.7
|
9.5
|
13.4
|
Deferred tax on other temporary
differences
|
|
(0.1)
|
0.1
|
–
|
|
|
(14.6)
|
(29.4)
|
(42.1)
|
|
|
|
|
|
Items that may be
subsequently reclassified to profit or loss
|
|
|
|
|
Losses in the period in respect of
cash flow hedges
|
17
|
(12.8)
|
(30.4)
|
(34.3)
|
Amounts reclassified to the income
statement in respect of cash flow hedges
|
17
|
5.4
|
(6.1)
|
(4.6)
|
Current tax in respect of cash flow
hedges accounted for in the
hedging reserve
|
|
–
|
–
|
(0.2)
|
Deferred tax in respect of cash
flow hedges accounted for in the hedging reserve
|
17
|
1.5
|
7.3
|
7.3
|
Exchange differences reclassified
to profit or loss on disposal of foreign operations
|
17
|
–
|
(0.3)
|
(0.3)
|
Exchange differences on translation
of foreign operations
|
17
|
(8.5)
|
(3.9)
|
(3.4)
|
Tax on exchange differences
accounted for in the translation reserve
|
17
|
(0.3)
|
(0.2)
|
(0.6)
|
|
|
(14.7)
|
(33.6)
|
(36.1)
|
|
|
|
|
|
Other
comprehensive expense for the period, net of tax
|
|
(29.3)
|
(63.0)
|
(78.2)
|
|
|
|
|
|
Total
comprehensive income/(expense) for the period attributable to the
equity shareholders
|
|
30.6
|
(8.6)
|
45.8
|
|
|
|
|
|
BRITVIC
PLC
CONDENSED
CONSOLIDATED BALANCE SHEET
As at 31 March
2024
|
|
|
Restated*
|
|
|
|
31 March 2024
|
31 March 2023
|
30 September 2023
|
|
|
(unaudited)
|
(unaudited)
|
(audited)
|
|
Note
|
£m
|
£m
|
£m
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
Property, plant and
equipment
|
9
|
536.7
|
516.6
|
535.3
|
Right-of-use assets
|
|
63.2
|
63.9
|
61.1
|
Goodwill and intangible
assets
|
9
|
460.7
|
410.9
|
434.3
|
Trade and other
receivables
|
|
12.8
|
8.3
|
8.1
|
Derivative financial
instruments
|
13
|
12.7
|
18.1
|
16.0
|
Deferred tax assets
|
|
3.7
|
4.1
|
4.2
|
Retirement benefit
assets
|
15
|
61.9
|
108.4
|
74.0
|
|
|
1,151.7
|
1,130.3
|
1,133.0
|
Current
assets
|
|
|
|
|
Inventories
|
|
214.2
|
218.8
|
209.8
|
Trade and other
receivables
|
|
434.7
|
394.7
|
425.6
|
Current income tax
receivables
|
|
3.9
|
6.7
|
5.3
|
Derivative financial
instruments
|
13
|
4.7
|
17.6
|
17.4
|
Interest-bearing
deposits
|
|
6.1
|
6.2
|
10.9
|
Cash and cash
equivalents
|
|
29.8
|
41.8
|
79.2
|
|
|
693.4
|
685.8
|
748.2
|
Assets held for sale
|
18
|
16.8
|
16.8
|
16.8
|
|
|
710.2
|
702.6
|
765.0
|
Total
assets
|
|
1,861.9
|
1,832.9
|
1,898.0
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Trade and other payables
|
|
(468.9)
|
(473.1)
|
(533.6)
|
Commercial rebate
liabilities
|
|
(109.8)
|
(111.3)
|
(123.3)
|
Lease liabilities
|
|
(8.4)
|
(7.5)
|
(7.5)
|
Interest-bearing loans and
borrowings
|
10
|
(39.6)
|
(50.4)
|
(50.9)
|
Derivative financial
instruments
|
13
|
(7.2)
|
(8.6)
|
(8.3)
|
Current income tax
liabilities
|
|
-
|
–
|
(0.1)
|
Overdrafts
|
|
(29.2)
|
(23.0)
|
(48.9)
|
Provisions
|
|
(0.5)
|
(0.9)
|
(0.7)
|
Other current
liabilities
|
|
(21.7)
|
(5.6)
|
(8.4)
|
|
|
(685.3)
|
(680.4)
|
(781.7)
|
Non-current
liabilities
|
|
|
|
|
Lease liabilities
|
|
(61.3)
|
(61.9)
|
(59.8)
|
Interest-bearing loans and
borrowings
|
10
|
(673.9)
|
(589.6)
|
(551.0)
|
Deferred tax liabilities
|
|
(108.4)
|
(107.2)
|
(111.1)
|
Retirement benefit
obligations
|
15
|
(1.6)
|
(1.2)
|
(1.4)
|
Derivative financial
instruments
|
13
|
(0.7)
|
(1.1)
|
(0.3)
|
Provisions
|
|
(0.8)
|
(1.0)
|
(1.0)
|
Other non-current
liabilities
|
|
(9.2)
|
–
|
–
|
|
|
(855.9)
|
(762.0)
|
(724.6)
|
Total
liabilities
|
|
(1,541.2)
|
(1,442.4)
|
(1,506.3)
|
Net
assets
|
|
320.7
|
390.5
|
391.7
|
|
|
|
|
|
Equity
|
|
|
|
|
Issued share capital
|
11
|
49.9
|
51.7
|
50.9
|
Share premium account
|
|
157.2
|
157.2
|
157.2
|
Own shares reserve
|
|
(29.0)
|
(16.8)
|
(21.4)
|
Other reserves
|
17
|
66.4
|
77.5
|
78.8
|
Retained earnings
|
|
76.2
|
120.9
|
126.2
|
Total
equity
|
|
320.7
|
390.5
|
391.7
|
*Comparative figures for interest-bearing
deposits and cash and cash equivalents have been restated as set
out in note 2 ‘basis of preparation’.
BRITVIC
PLC
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
For the 6 months
ended 31 March 2024
|
|
6 months ended
|
Restated*
6 months ended
|
12 months ended
|
|
|
31 March 2024
|
31 March 2023
|
30 September 2023
|
|
|
(unaudited)
|
(unaudited)
|
(audited)
|
|
Note
|
£m
|
£m
|
£m
|
Cash flows from
operating activities
|
|
|
|
|
Profit before tax
|
|
78.2
|
69.3
|
156.8
|
Net finance costs
|
|
14.9
|
11.4
|
24.7
|
Other financial
instruments
|
|
–
|
(2.9)
|
(0.6)
|
Depreciation of property, plant and
equipment
|
|
23.7
|
21.7
|
44.8
|
Depreciation of right-of-use
assets
|
|
4.5
|
5.1
|
10.1
|
Amortisation
|
|
9.6
|
8.0
|
15.6
|
Loss on disposal of property, plant
and equipment and intangible assets
|
|
–
|
1.7
|
3.2
|
Reversal of impairment of
intangibles
|
|
(3.6)
|
–
|
–
|
Impairment of property, plant and
equipment
|
|
–
|
–
|
3.8
|
Share-based payments charge, net of
cash settlements
|
|
9.0
|
5.8
|
9.3
|
Net pension charge less
contributions
|
|
(7.0)
|
(8.8)
|
9.4
|
Net foreign exchange
differences
|
|
(0.2)
|
(0.4)
|
0.1
|
Exchange differences reclassified
to profit or loss from other comprehensive income
|
|
–
|
(0.3)
|
(0.3)
|
Increase in inventory
|
|
(5.5)
|
(48.8)
|
(37.8)
|
(Increase)/decrease in trade and
other receivables
|
|
(15.1)
|
43.2
|
16.3
|
(Decrease)/increase in trade and
other payables and commercial rebate liabilities
|
|
(71.5)
|
(58.9)
|
5.8
|
Decrease in provisions
|
|
(0.5)
|
(0.8)
|
(0.9)
|
Income tax paid
|
|
(11.7)
|
(9.6)
|
(21.9)
|
Net cash flows
from operating activities
|
|
24.8
|
35.7
|
238.4
|
Cash flows from
investing activities
|
|
|
|
|
Purchases of property, plant and
equipment
|
|
(30.5)
|
(25.5)
|
(69.8)
|
Government grants towards purchase
of equipment
|
|
1.1
|
–
|
1.3
|
Purchases of intangible
assets
|
|
(3.5)
|
(3.9)
|
(8.1)
|
Investments in interest-bearing
deposits
|
|
(5.1)
|
(6.2)
|
(11.2)
|
Proceeds from interest-bearing
deposits
|
|
9.9
|
11.5
|
11.8
|
Interest received
|
|
0.6
|
0.3
|
0.5
|
Acquisition of subsidiaries, net of
cash acquired
|
19
|
(24.1)
|
–
|
(24.8)
|
Net cash flows
used in investing activities
|
|
(51.6)
|
(23.8)
|
(100.3)
|
Cash flows from
financing activities
|
|
|
|
|
Interest paid, net of derivative
financial instruments
|
|
(14.7)
|
(9.3)
|
(21.1)
|
Net movement on revolving credit
facility
|
10
|
12.0
|
83.1
|
45.5
|
Repayment of other loans
|
|
–
|
–
|
(1.9)
|
Payment of principal portion of
lease liabilities
|
|
(4.2)
|
(5.0)
|
(9.0)
|
Payment of interest portion of
lease liabilities
|
|
(0.9)
|
(1.0)
|
(1.9)
|
Proceeds from issue of private
placement notes
|
10
|
150.0
|
–
|
–
|
Repayment of private placement
notes, net of derivative financial instruments
|
10
|
(39.2)
|
(27.8)
|
(27.8)
|
Other net derivative
cashflows
|
|
–
|
–
|
(0.2)
|
Proceeds from employee share
incentive schemes
|
|
2.7
|
0.9
|
2.3
|
Purchase of own shares related to
share schemes
|
|
(12.1)
|
(16.7)
|
(20.3)
|
Share buyback programme
|
|
(40.6)
|
(38.8)
|
(73.7)
|
Dividends paid to equity
shareholders
|
12
|
(55.8)
|
(54.6)
|
(75.5)
|
Net cash flows
from financing activities
|
|
(2.8)
|
(69.2)
|
(183.6)
|
Net decrease in
cash and cash equivalents
|
|
(29.6)
|
(57.3)
|
(45.5)
|
Cash and cash equivalents at the
beginning of the period
|
|
30.3
|
76.1
|
76.1
|
Net foreign exchange differences on
cash and cash equivalents
|
|
(0.1)
|
–
|
(0.3)
|
Cash and cash
equivalents at the end of the period
|
|
0.6
|
18.8
|
30.3
|
Presented in the balance sheet
as:
|
|
|
|
|
Cash and cash
equivalents
|
|
29.8
|
41.8
|
79.2
|
Overdrafts(2)
|
|
(29.2)
|
(23.0)
|
(48.9)
|
Cash and cash
equivalents at the end of the period
|
|
0.6
|
18.8
|
30.3
|
-
Comparative figures for cash and cash
equivalents at 31 March 2023 have been restated as set out in note
2 ‘basis of preparation’.
-
Overdrafts are included in cash and
cash equivalents presented in the statement of cash flows as they
form an integral part of the Group’s cash management.
BRITVIC
PLC
CONDENSED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the 6 months
ended 31 March 2024
|
|
For the 6 months
ended 31 March 2024 (unaudited)
|
|
|
|
|
Other
reserves
|
|
|
|
Issued
share
capital
|
Share
premium
account
|
Own
shares
reserve
|
Capital
redemption reserve
|
Hedging
reserve
|
Translation
reserve
|
Merger
reserve
|
Retained
earnings
|
Total
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
At 1 October
2023
|
50.9
|
157.2
|
(21.4)
|
2.7
|
2.6
|
(13.8)
|
87.3
|
126.2
|
391.7
|
Profit for the period
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
59.9
|
59.9
|
Other comprehensive
expense
|
–
|
–
|
–
|
–
|
(5.9)
|
(8.8)
|
–
|
(14.6)
|
(29.3)
|
Total comprehensive
(expense)/income
|
–
|
–
|
–
|
–
|
(5.9)
|
(8.8)
|
–
|
45.3
|
30.6
|
Share buyback programme
|
(1.0)
|
–
|
2.7
|
1.0
|
–
|
–
|
–
|
(40.5)
|
(37.8)
|
Own shares purchased for share
schemes
|
–
|
–
|
(22.4)
|
–
|
–
|
–
|
–
|
–
|
(22.4)
|
Own shares utilised for share
schemes
|
–
|
–
|
12.1
|
–
|
–
|
–
|
–
|
(12.1)
|
–
|
Proceeds from share
schemes
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
2.7
|
2.7
|
Movement in share-based
schemes
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
9.0
|
9.0
|
Current tax on share-based
payments
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
1.0
|
1.0
|
Deferred tax on share-based
payments
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
0.4
|
0.4
|
Transfer of cash flow hedge reserve
to inventories
|
–
|
–
|
–
|
–
|
1.8
|
–
|
–
|
–
|
1.8
|
Transfer of cash flow hedge reserve
to goodwill
|
–
|
–
|
–
|
–
|
(0.5)
|
–
|
–
|
–
|
(0.5)
|
Payment of dividend
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
(55.8)
|
(55.8)
|
At 31 March
2024
|
49.9
|
157.2
|
(29.0)
|
3.7
|
(2.0)
|
(22.6)
|
87.3
|
76.2
|
320.7
|
|
|
For the 6 months
ended 31 March 2023 (unaudited)
|
|
|
|
|
Other
reserves
|
|
|
|
Issued
share
capital
|
Share
premium
account
|
Own
shares
reserve
|
Capital
redemption reserve
|
Hedging
reserve
|
Translation
reserve
|
Merger
reserve
|
Retained
earnings
|
Total
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
At 1 October
2022
|
52.7
|
157.2
|
(7.2)
|
0.9
|
27.3
|
(9.5)
|
87.3
|
179.3
|
488.0
|
Profit for the period
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
54.4
|
54.4
|
Other comprehensive
expense
|
–
|
–
|
–
|
–
|
(29.2)
|
(4.4)
|
–
|
(29.4)
|
(63.0)
|
Total comprehensive
(expense)/income
|
–
|
–
|
–
|
–
|
(29.2)
|
(4.4)
|
–
|
25.0
|
(8.6)
|
Share buyback programme
|
(1.0)
|
–
|
1.1
|
1.0
|
–
|
–
|
–
|
(38.7)
|
(37.6)
|
Own shares purchased for share
schemes
|
–
|
–
|
(16.4)
|
–
|
–
|
–
|
–
|
9.8
|
(6.6)
|
Own shares utilised for share
schemes
|
–
|
–
|
5.7
|
–
|
–
|
–
|
–
|
(4.8)
|
0.9
|
Movement in share-based
schemes
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
4.6
|
4.6
|
Current tax on share-based
payments
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
0.1
|
0.1
|
Deferred tax on share-based
payments
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
0.2
|
0.2
|
Transfer of cash flow hedge reserve
to inventories
|
–
|
–
|
–
|
–
|
4.1
|
–
|
–
|
–
|
4.1
|
Payment of dividend
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
(54.6)
|
(54.6)
|
At 31 March
2023
|
51.7
|
157.2
|
(16.8)
|
1.9
|
2.2
|
(13.9)
|
87.3
|
120.9
|
390.5
|
BRITVIC
PLC
notes
to the financial information
For the 6 months
ended 31 March 2024
-
General information
Britvic plc (the ‘Company’,
together with its subsidiaries, the ‘Group’) is a company
incorporated in the United Kingdom under the Companies Act 2006. It
is a public company limited by shares domiciled in England and
Wales and its ordinary shares are traded on the London Stock
Exchange. The address of the registered office is Britvic plc,
Breakspear Park, Breakspear Way, Hemel Hempstead, Hertfordshire,
HP2 4TZ.
The interim financial statements
were authorised for issue by the Board of Directors on 14 May
2024.
-
Basis of preparation
The annual financial statements of
the Group will be prepared in accordance with United Kingdom
adopted International Accounting Standards. The condensed set of
financial statements included in this interim financial report has
been prepared in accordance with the Disclosure and Transparency
Rules of the Financial Conduct Authority and with the United
Kingdom adopted International Accounting Standard (IAS) 34 ‘Interim
Financial Reporting’. The interim condensed financial statements
comprise the condensed consolidated balance sheet as at 31 March
2024 and the condensed consolidated income statement, condensed
consolidated statement of cash flows, condensed consolidated
statement of comprehensive income/(expense), condensed consolidated
statement of changes in equity and the related notes 1 to 20 for
the 6 months then ended of Britvic plc (the ‘financial
information’).
These interim consolidated
financial statements do not constitute statutory accounts as
defined in section 434 of the Companies Act 2006. The statutory
accounts for Britvic plc for the year ended 30 September 2023 have
been delivered to the Registrar of Companies. The auditors reported
on those accounts: their report was unqualified, did not draw
attention to any matters by way of emphasis and did not contain a
statement under section 498(2) or (3) of the Companies Act
2006.
Restatement of
interest-bearing deposits and cash and cash equivalents
The Group places surplus cash on
deposit with banks to earn a fixed rate of interest over the
maturity period. These deposits have historically been presented
within cash and cash equivalents. During the prior year the Group
reviewed deposit terms and identified that certain deposit balances
did not meet the definition of cash and cash equivalents in IAS 7
‘Statement of Cash Flows’, as the deposits were not held for the
purpose of meeting short-term cash commitments and had contractual
maturities in excess of three months. The previously reported
balance sheet for 31 March 2023 included £6.2m of such deposits in
cash and cash equivalents. The balance sheet has therefore been
restated to show these interest-bearing deposits separately within
current assets. There is no impact to the Group’s net debt
position. The value of cash and cash equivalents shown in the
statement of cash flows at 31 March 2023 has been restated to
exclude the £6.2m of deposits held, and new lines for “investments
in interest-bearing deposits” and “proceeds from interest bearing
deposits” have been included within net cash flows used in
investing activities. The review of deposit terms was completed
ahead of preparing the Group’s financial statements for the year to
30 September 2023, and as such no restatement is required for the
consolidated balance sheet or cash flow statement for 30 September
2023.
-
Going concern
The Directors are satisfied that
the Group has adequate resources to continue to operate as a going
concern for the foreseeable future and that no material
uncertainties exist which could cause significant doubt with
respect to this assessment. In making this assessment, the
Directors have considered the Group’s balance sheet position and
forecast earnings and cash flows for the period from the date of
approval of these financial statements to 30 September 2025. In
February 2025
£35m of the Group’s private
placement notes and £33m of the Group’s revolving credit facility
mature.
As part of the going concern
assessment, volume demand scenarios have been combined with the
potential impact of key risks that could reasonably arise in the
period. The Group has modelled both a base case scenario and a
severe but plausible downside scenario, to assess the extent to
which mitigating actions would be required, all of which are within
management’s control. Mitigating actions can be initiated as they
relate to discretionary and investment spend, without significantly
impacting the ability to meet demand.
Under all the scenarios modelled,
and after taking available mitigating actions, our forecasts did
not indicate a covenant breach or any liquidity shortages. On the
basis of these reviews, the Directors consider it is appropriate
for the going concern basis to be adopted in preparing the interim
financial statements.
-
Accounting policies
The accounting policies applied by
the Group in these interim financial statements are consistent with
those applied by the Group in its financial statements for the year
ended 30 September 2023. There were no new amendments, standards or
interpretations that had a material effect on the financial
position or performance of the Group in the period.
The Group has not identified any
changes to critical accounting judgments in applying its accounting
policies or to key sources of estimation uncertainty compared with
those disclosed in the 2023 Annual Report and Accounts.
-
Seasonality of operations
Due to the seasonal nature of the
business, higher operating profits are usually expected in the
second half of the year than in the first half.
-
Segmental reporting
Operating segments are reported in a manner consistent with
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the plc Executive team and Board
of Directors of the Company.
For management purposes, the Group is organised into business units
and has five reportable segments:
-
GB (United
Kingdom excluding Northern Ireland)
-
Brazil
-
Ireland
(Republic of Ireland and Northern Ireland)
-
France
-
International
These business units sell soft drinks into their respective
geographical 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. All other costs, including net finance costs
and income taxes, are managed on a centralised basis and are not
allocated to reportable segments.
The ‘Other International’ subtotal comprising the Ireland, France
and International reportable segments has been presented to provide
linkage to the Financial Review section of the interim
results.
|
|
|
Other
International
|
|
6 months ended 31
March 2024
|
GB
£m
|
Brazil
£m
|
Ireland
£m
|
France
£m
|
International
£m
|
Subtotal
£m
|
Total
£m
|
Revenue from
external customers
|
592.2
|
102.0
|
79.0
|
82.3
|
24.8
|
186.1
|
880.3
|
Brand
contribution
|
248.0
|
27.3
|
26.6
|
17.8
|
2.6
|
47.0
|
322.3
|
Non-brand advertising &
promotion(1)
|
|
|
|
|
|
|
(5.6)
|
Fixed supply
chain(2)
|
|
|
|
|
|
|
(81.1)
|
Selling costs(2)
|
|
|
|
|
|
|
(50.6)
|
Overheads and other
costs(1)
|
|
|
|
|
|
|
(84.6)
|
Adjusted
EBIT
|
|
|
|
|
|
|
100.4
|
Net finance costs pre-adjusting
items
|
|
|
|
|
|
|
(14.4)
|
Adjusting items(3)
|
|
|
|
|
|
|
(7.8)
|
Profit before
tax
|
|
|
|
|
|
|
78.2
|
|
|
|
|
|
|
|
|
|
|
|
Other
International
|
|
6 months ended 31
March 2023
|
GB
£m
|
Brazil
£m
|
Ireland
£m
|
France
£m
|
International
£m
|
Subtotal
£m
|
Total
£m
|
Revenue from
external customers
|
544.2
|
75.7
|
74.0
|
77.0
|
23.1
|
174.1
|
794.0
|
Brand
contribution
|
218.6
|
18.2
|
22.9
|
15.1
|
4.7
|
42.7
|
279.5
|
Non-brand advertising &
promotion(1)
|
|
|
|
|
|
|
(6.0)
|
Fixed supply
chain(2)
|
|
|
|
|
|
|
(70.2)
|
Selling costs(2)
|
|
|
|
|
|
|
(45.3)
|
Overheads and other
costs(1)
|
|
|
|
|
|
|
(72.7)
|
Adjusted
EBIT
|
|
|
|
|
|
|
85.3
|
Net finance costs pre-adjusting
items
|
|
|
|
|
|
|
(11.4)
|
Adjusting items(3)
|
|
|
|
|
|
|
(4.6)
|
Profit before
tax
|
|
|
|
|
|
|
69.3
|
|
|
|
|
|
|
|
|
|
|
|
Other
International
|
|
12 months ended
30 September 2023
|
GB
£m
|
Brazil
£m
|
Ireland
£m
|
France
£m
|
International
£m
|
Subtotal
£m
|
Total
£m
|
Revenue from
external customers
|
1,187.7
|
156.2
|
160.3
|
185.0
|
59.4
|
404.7
|
1,748.6
|
Brand
contribution
|
479.6
|
36.2
|
52.3
|
35.7
|
11.6
|
99.6
|
615.4
|
Non-brand advertising &
promotion(1)
|
|
|
|
|
|
|
(11.8)
|
Fixed supply
chain(2)
|
|
|
|
|
|
|
(145.5)
|
Selling costs(2)
|
|
|
|
|
|
|
(96.7)
|
Overheads and other
costs(1)
|
|
|
|
|
|
|
(143.0)
|
Adjusted
EBIT
|
|
|
|
|
|
|
218.4
|
Net finance costs pre-adjusting
items
|
|
|
|
|
|
|
(23.2)
|
Adjusting items(3)
|
|
|
|
|
|
|
(38.4)
|
Profit before
tax
|
|
|
|
|
|
|
156.8
|
|
|
|
|
|
|
|
|
(1) Included
within ‘administration expenses’ in the condensed consolidated
income statement. ‘Overheads and other costs’ relate to central
expenses including salaries, IT maintenance, depreciation, and
non-acquisition amortisation.
(2) Included
within ‘selling and distribution expenses’ in the condensed
consolidated income statement.
-
See appendix 1 for further details on
adjusting items.
-
Income tax
The total tax charge for the period
is £18.3m (6 months ended 31 March 2023: £14.9m) which equates to
an effective tax rate of 23.4% (6 months ended 31 March 2023:
21.5%).
Tax charge by
region
|
|
|
|
|
6 months ended
|
6 months ended
|
12 months ended
|
|
31 March 2024
|
31 March 2023
|
30 September 2023
|
|
£m
|
£m
|
£m
|
UK
|
17.7
|
16.0
|
31.9
|
Foreign
|
0.6
|
(1.1)
|
0.9
|
Total tax charge
in the condensed consolidated income statement
|
18.3
|
14.9
|
32.8
|
Analysis of tax
charge
|
|
|
|
|
6 months ended
|
6 months ended
|
12 months ended
|
|
31 March 2024
|
31 March 2023
|
30 September 2023
|
|
£m
|
£m
|
£m
|
Current income tax
charge
|
13.6
|
13.7
|
28.6
|
Deferred income tax
charge
|
4.7
|
1.2
|
4.2
|
Total tax charge
in the condensed consolidated income statement
|
18.3
|
14.9
|
32.8
|
The effective tax rate for the 6
months ended 31 March 2024 has increased compared to the effective
tax rate for the 6 months ended 31 March 2023. This is mainly due
to the increase in the UK tax rate to 25%.
The deferred tax charge has
increased compared to the 6 months ended 31 March 2023. This
primarily relates to a decrease in the deferred tax asset on
employee incentive plans and an increase in the deferred tax
liability on fixed assets as a result of full expensing.
In June 2023, Finance (No.2) Act
2023 was substantively enacted in the UK, introducing a global
minimum effective tax rate of 15%. The legislation implements a
domestic top-up tax and a multinational top-up tax, effective for
accounting periods starting on or after 31 December 2023. The Group
has applied the exception under the IAS 12 amendment to not
recognise or disclose any information about deferred tax assets and
liabilities related to top-up income taxes.
-
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 issuable in
connection with employee share-based payment plans.
The following table reflects the
income and share data used in the basic and diluted earnings per
share computations:
|
|
|
|
|
6 months ended
|
6 months ended
|
12 months ended
|
|
31 March 2024
|
31 March 2023
|
30 September 2023
|
Basic earnings
per share
|
|
|
|
Profit for the period attributable
to the equity shareholders (£m)
|
59.9
|
54.4
|
124.0
|
Weighted average number of ordinary
shares in issue for basic earnings per share (millions)
|
248.1
|
258.6
|
256.9
|
Basic earnings
per share (pence)
|
24.1p
|
21.0p
|
48.3p
|
|
|
|
|
Diluted earnings
per share
|
|
|
|
Profit for the period attributable
to the equity shareholders (£m)
|
59.9
|
54.4
|
124.0
|
Dilutive shares on employee share
schemes (millions)
|
2.0
|
1.6
|
1.9
|
Weighted average number of ordinary
shares in issue for diluted earnings per share
(millions)
|
250.1
|
260.2
|
258.8
|
Diluted earnings
per share (pence)
|
23.9p
|
20.9p
|
47.9p
|
-
Property, plant and equipment and intangible
assets
Property, plant
and equipment
During the 6 months ended 31 March
2024:
-
the Group capitalised property,
plant and equipment additions at a cost of £24.1m (6 months ended
31 March 2023: £27.5m); and
-
there were no disposals of
property, plant and equipment (6 months ended 31 March 2023:
disposals of £1.7m and loss on disposal of £1.7m).
There were no impairments or
reversals of impairments recognised during the 6 months ended 31
March 2024 (6 months ended 31 March 2023: nil).
See note 16 for details of the
Group’s capital commitments.
Intangible
assets
During the 6 months ended 31 March
2024:
-
the Group capitalised £3.1m of
software additions (6 months ended 31 March 2023:
£3.8m);
-
recognised goodwill and intangibles
of £37.6m upon acquisition in Brazil (see note 19); and
-
reversed impairment of £3.6m
related to the Ballygowan trademark intangible following strong
growth in sales and the successful launch of Ballygowan’s Hint of
Fruit range in the flavoured water category.
The Group performed its last annual
impairment test for goodwill and intangible assets with indefinite
lives in September 2023. The key assumptions used to determine the
recoverable amount for the different cash generating units were
disclosed in the Group’s Annual Report and Accounts
2023.
Since the last annual impairment
test, management have evaluated whether there are any indicators
that the Group’s assets may be impaired, or a reversal of
impairment may be required. This evaluation included a review of
business performance for the 6 months ended 31 March 2024 and
latest forecasts for the full year ended 30 September 2024 against
the budgets used in the last impairment test. Changes in the
applicable discount rates to determine value in use were also
considered.
During the 6 months ended 31 March
2024, the performance in Britvic France and Britvic Brazil has
strengthened compared to the prior year. In relation to the Plenish
intangibles, the Directors do not consider that a reasonable
possible change in the assumptions used to calculate recoverable
amounts could result in any impairment as the brand performance has
also strengthened since prior year. There have been no indicators
of impairment and as such no impairment assessment was deemed
necessary at the half year, accordingly no impairment disclosures
are provided within these interim consolidated
accounts.
During the 6 months ended 31 March
2024, £3.6m of impairment from prior years was fully reversed on
the Ballygowan brand in Britvic Ireland as a result of strong in
year and projected performance of Ballygowan’s Hint of Fruit range
in the flavoured water category. For the Ballygowan brand where a
reversal of impairment has been made during the current period,
management have noted no reasonable change to key assumptions would
result in a material change to the reversal amount.
-
Interest-bearing loans and borrowings
Components of interest-bearing
loans and borrowings:
|
31 March 2024
|
31 March 2023
|
30 September 2023
|
|
£m
|
£m
|
£m
|
2014 Notes
|
(59.4)
|
(107.5)
|
(108.5)
|
2017 Notes
|
(175.0)
|
(175.0)
|
(175.0)
|
2018 Notes
|
(119.2)
|
(120.1)
|
(119.7)
|
2020 Notes
|
(151.3)
|
(152.8)
|
(151.9)
|
2024 Notes
|
(150.0)
|
–
|
–
|
Bank loans
|
(56.2)
|
(83.0)
|
(44.7)
|
Accrued interest
|
(4.8)
|
(3.9)
|
(4.1)
|
Unamortised issue costs
|
2.4
|
2.3
|
2.0
|
Total
interest-bearing loans and borrowings
|
(713.5)
|
(640.0)
|
(601.9)
|
Current
|
(39.6)
|
(50.4)
|
(50.9)
|
Non-current
|
(673.9)
|
(589.6)
|
(551.0)
|
Total
interest-bearing loans and borrowings
|
(713.5)
|
(640.0)
|
(601.9)
|
In March 2024, the Group issued US
private placement notes with a total sterling value of £150.0m.
Maturities range from March 2029 to March 2034 and interest terms
are fixed, ranging from 5.29% to 5.41%.
The next maturity for the Group’s
private placement notes is in February 2025, when 2017 Notes with
outstanding principal amounts of £35.0m will be due for repayment.
These borrowings are classified as current at 31 March
2024.
At 31 March 2024, the Group had
committed borrowing facilities available of £400.0m, of which
£343.8m was undrawn. All conditions precedent for these facilities
had been met. £33.3m of the borrowing facilities mature in February
2025 with the remaining £366.7m expiring in February
2027.
Analysis of changes in
interest-bearing loans and borrowings:
|
|
|
|
|
6 months ended
|
6 months ended
|
12 months ended
|
|
31 March 2024
|
31 March 2023
|
30 September 2023
|
|
£m
|
£m
|
£m
|
At the beginning
of the period
|
(601.9)
|
(605.3)
|
(605.3)
|
Net movement on revolving credit
facility
|
(12.0)
|
(83.1)
|
(45.5)
|
Other loans acquired
|
–
|
–
|
(1.9)
|
Other loans repaid
|
–
|
–
|
1.9
|
Repayment of private placement
notes*
|
45.7
|
36.6
|
36.6
|
Issue of private placement
notes
|
(150.0)
|
–
|
–
|
Issue costs
|
0.6
|
–
|
–
|
Amortisation of issue
costs
|
(0.2)
|
(0.3)
|
(0.6)
|
Net translation gain and fair value
adjustment
|
5.0
|
12.5
|
13.5
|
Net movement in accrued
interest
|
(0.7)
|
(0.4)
|
(0.6)
|
At the end of the
period
|
(713.5)
|
(640.0)
|
(601.9)
|
Derivatives hedging balance sheet
debt**
|
12.8
|
21.6
|
22.6
|
Debt translated
at contracted rate
|
(700.7)
|
(618.4)
|
(579.3)
|
* During the 6 months ended 31
March 2024, the Group repaid £45.7m of the 2014 private placement
notes. £6.5m was also received on maturity of derivatives hedging
the 2014 Notes, resulting in net cash outflows presented in the
consolidated statement of cash flows of £39.2m. During the 6 months
ended 31 March 2023, the Group repaid £36.6m of the 2010 private
placement notes. £7.8m was also received on maturity of derivatives
hedging the 2010 Notes and £1.0m was received in respect of the
firm commitment for the 2010 Notes, resulting in net cash outflows
presented in the consolidated statement of cash flows of
£27.8m.
** Represents the element of the
fair value of cross-currency interest rate 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.
-
Share capital and own shares reserve
The issued share capital is wholly
comprised of ordinary shares carrying one voting right each. The
nominal value of each ordinary share is £0.20. There are no
restrictions placed on the distribution of dividends, or the return
of capital on a winding up or otherwise.
The movements in the Company’s
issued share capital were as follows:
|
6 months ended
|
6 months ended
|
12 months ended
|
|
31 March 2024
|
31 March 2023
|
30 September 2023
|
|
No. of shares
|
No. of shares
|
No. of shares
|
At the beginning of the
period
|
254,268,497
|
263,300,881
|
263,300,881
|
Shares cancelled pursuant to share
buyback
|
(4,789,533)
|
(5,015,350)
|
(9,032,384)
|
At the end of the period
|
249,478,964
|
258,285,531
|
254,268,497
|
|
6 months ended
|
6 months ended
|
12 months ended
|
|
31 March 2024
|
31 March 2023
|
30 September 2023
|
|
£m
|
£m
|
£m
|
At the beginning of the
period
|
50.9
|
52.7
|
52.7
|
Shares cancelled pursuant to share
buyback
|
(1.0)
|
(1.0)
|
(1.8)
|
At the end of the period
|
49.9
|
51.7
|
50.9
|
Of the issued and fully paid
ordinary shares, 2,169,231 shares (30 September 2023: 2,179,294
shares, 31 March 2023: 1,996,643 shares) are own shares held by an
employee benefit trust. This equates to £433,846 (30 September
2023: £435,859, 31 March 2023: £399,329) at £0.20 par value of each
ordinary share. These shares are held for the purpose of satisfying
the Group’s share schemes.
The movements in the Company’s own
shares reserve are as follows:
|
6 months ended
|
6 months ended
|
12 months ended
|
|
31 March 2024
|
31 March 2023
|
30 September 2023
|
|
£m
|
£m
|
£m
|
At the beginning of the
period
|
21.4
|
7.2
|
7.2
|
Shares purchased for share
schemes
|
22.4
|
16.4
|
20.1
|
Shares used to satisfy share
schemes
|
(12.1)
|
(5.7)
|
(7.6)
|
Shares purchased pursuant to share
buyback
|
37.6
|
37.4
|
74.8
|
Shares cancelled pursuant to share
buyback
|
(40.3)
|
(38.5)
|
(73.1)
|
At the end of the period
|
29.0
|
16.8
|
21.4
|
The own shares reserve represents
shares in the Company purchased from the market and held by an
employee benefit trust to satisfy share awards under the Group’s
share schemes as well as shares purchased for cancellation as part
of the share buyback programme. Shares purchased for cancellation
are included in the own shares reserve until cancellation, at which
point the consideration paid is transferred to retained earnings
and the nominal value of the shares is transferred from share
capital to the capital redemption reserve. Own shares held can
include equity elements of forward contracts where the Group has an
obligation to purchase its own shares.
Share buyback
programme
On 24 May 2023, the Company
commenced a share buyback programme (the Programme) to repurchase
ordinary shares with a market value of up to £75.0m. The purpose of
the Programme was to reduce the Company’s share capital and
therefore the shares purchased pursuant to the Programme were
subsequently cancelled. Subsequent to 31 March 2024, a third share
buyback of £75m over the next 12 months has also been
approved.
During the six months ended 31
March 2024, the Company completed the Programme, purchasing
4,478,603 ordinary shares at an average price of 838.9p per share
and an aggregate cost of £37.8m, including £0.2m of transaction
costs. In aggregate under the Programme, 8,806,567 shares were
repurchased at an average price of 851.7p and at a total cost of
£75.0m, including £0.5m of transaction costs.
-
Dividends paid and proposed
|
6 months ended
|
6 months ended
|
12 months ended
|
|
31 March 2024
|
31 March 2023
|
30 September 2023
|
Declared and paid
in the period
|
|
|
|
Dividends per share
(pence)
|
22.6p
|
21.2p
|
29.4p
|
Total dividend (£m)
|
55.8
|
54.6
|
75.5
|
|
|
|
|
Proposed after
the balance sheet date
|
|
|
|
Dividend per share
(pence)
|
9.5p
|
8.2p
|
22.6p
|
Total dividend (£m)
|
23.6
|
21.2
|
57.4
|
-
Derivatives and hedge
relationships
The Group’s outstanding derivatives
were as follows:
|
6 months ended
31 March 2024
|
6 months ended
31 March 2023
|
12 months ended
30 September 2023
|
|
£m
|
£m
|
£m
|
Consolidated
balance sheet
|
|
|
|
|
|
|
|
Non-current
assets: derivative financial instruments
|
|
|
|
USD GBP cross currency fixed
interest rate swaps*
|
11.9
|
14.2
|
14.0
|
Forward currency
contracts*
|
–
|
–
|
0.1
|
Commodity contracts*
|
0.8
|
2.5
|
1.2
|
Interest rate swaps*
|
–
|
1.4
|
0.7
|
|
12.7
|
18.1
|
16.0
|
|
|
|
|
Current
assets: derivative financial instruments
|
|
|
|
USD GBP cross currency fixed
interest rate swaps*
|
0.6
|
7.6
|
8.3
|
Forward currency
contracts*
|
0.1
|
0.9
|
1.1
|
Forward currency
contracts
|
–
|
–
|
0.2
|
Commodity contracts*
|
2.3
|
5.5
|
6.1
|
Commodity contracts**
|
–
|
1.9
|
–
|
Interest rate swaps*
|
1.7
|
1.4
|
1.7
|
Forward currency
contracts
|
–
|
0.3
|
–
|
|
4.7
|
17.6
|
17.4
|
|
|
|
|
Current
liabilities: derivative financial instruments
|
|
|
|
Forward currency
contracts*
|
(1.8)
|
(0.7)
|
(1.2)
|
Forward currency
contracts
|
–
|
(0.1)
|
–
|
Foreign exchange
forwards
|
(0.1)
|
–
|
–
|
Commodity contracts*
|
(5.3)
|
(7.7)
|
(7.1)
|
Commodity contracts**
|
–
|
(0.1)
|
–
|
|
(7.2)
|
(8.6)
|
(8.3)
|
|
|
|
|
Non-current
liabilities: derivative financial instruments
|
|
|
|
Commodity contracts*
|
(0.6)
|
(1.0)
|
(0.3)
|
Forward currency
contracts*
|
(0.1)
|
(0.1)
|
–
|
|
(0.7)
|
(1.1)
|
(0.3)
|
|
|
|
|
Total net
derivative financial assets
|
9.5
|
26.0
|
24.8
|
* Instruments
designated as part of a cash flow hedge relationship.
**
Instruments
for which cash flow hedge accounting has been
discontinued.
The above derivatives and
associated hedge relationships are described in further detail on
pages 170 to 172 of the Group’s Annual Report and Accounts 2023. At
31 March 2024, the Group is party to a range of commodity
derivatives to hedge price risk associated with aluminium (cans),
diesel (logistics), sugar, natural gas, power and low-density
polyethylene (LDPE) and has designated these derivatives as cash
flow hedges.
Discontinued
cash flow hedges
In September 2022, the Group
discontinued hedge accounting for certain commodity derivatives
that were hedging purchases during the period from October 2022 to
March 2023 as there is no longer an economic relationship between
the hedged item and hedging instrument because of new commercial
arrangements with suppliers. Prior to the discontinuation of hedge
accounting, the Group had accumulated a gain of £13.8m through
other comprehensive income in the hedging reserve. This gain was
reclassified to profit or loss during the six months ended 31 March
2023 as
the hedged purchases
occurred.
-
Fair value of financial
instruments
The Group uses the following
valuation hierarchy when measuring financial instruments 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.
The financial instruments which the
Group measures at fair value on a recurring basis comprise the
derivatives set out in note 13 and the deferred and contingent
consideration payable for the acquisition of GCB (note 19). All
derivatives are valued based on level 2 in the hierarchy, i.e.
using valuation techniques with market observable inputs; this
covers cross-currency interest rate swaps, interest rate swaps,
foreign exchange forwards, foreign exchange swaps and commodity
swaps. The most frequently applied valuation techniques include
forward pricing and swap models using present value calculations.
In assessing the fair value of derivatives, the non-performance
risk of both the Group and its derivative trading counterparties
has been taken into consideration. Default credit risk has been
measured and the potential impact on derivatives valuations
quantified. As at 31 March 2024, the potential impact from
non-performance risk on the fair value of the derivatives portfolio
is not material.
As in the prior year, the carrying
value of financial assets and liabilities other than derivatives
(trade and other receivables, cash and cash equivalents,
overdrafts, interest-bearing loans and borrowings and trade and
other payables) are considered to be reasonable approximations of
their fair values, except for fixed rate borrowings, which have a
book value of £494.3m and a fair value of £442.8m at 31 March 2024
(30 September 2023: £393.7m book value compared to a fair value
£331.6m, 31 March 2023: £393.2m book value compared to a fair value
£337.6m). The fair value of the Group’s fixed rate interest-bearing
borrowings and loans are determined by using discounted cash flow
methods using discount rates that reflect the Group’s borrowing
rate as at the end of the reporting period. The own non-performance
risk as at 31 March 2024 was assessed to be
insignificant.
-
Retirement benefit
schemes
At 31 March 2024,
Britvic plc had IAS 19 defined benefit pension surpluses in GB and
ROI totalling £61.9m and an IAS 19 defined benefit pension deficit
in France of £1.6m (30 September 2023: pension surpluses in GB, ROI
and NI totalling £74.0m and a pension deficit in France of £1.4m,
31 March 2023: pension surpluses in GB, ROI and
NI totalling £108.4m and a pension deficit in France of £1.2m). The
decrease in the net defined benefit pension asset is primarily
attributable to a net remeasurement loss of £19.2m of which £12.5m
relates to the GB scheme and £6.4m relates to a change in the asset
ceiling for the NI scheme that resulted in the derecognition
of its net surplus.
The net income for defined benefit
schemes recognised in the income statement for the 6 months ended
31 March 2024 was £1.6m (6 months ended 31 March 2023: net income
of £3.2m).
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 1 April 2011, with new
employees being invited to join the defined contribution scheme.
The Northern Ireland scheme was closed to new members on 28
February 2006 and future accrual from 31 December 2018, and new
employees are eligible to join the defined contribution scheme. All
new employees in Ireland join the defined contribution
plan.
Contributions are paid into the
defined benefit section of the GB plan as determined by the
trustee, agreed by the Company and certified by an independent
actuary in the schedule of contributions. As noted in the Group’s
Annual Report and Accounts 2023, no further deficit funding
payments are due to be paid except for the £5.0m annual partnership
payment which will continue until 2025. The triennial valuation as
of 31 March 2022 was finalised in April 2023 and did not result in
any change to the schedule of contributions.
The Group is aware of the High
Court ruling in the case of Virgin Media Ltd v NTL Pension Trustees
II Ltd & Ors and the subsequent appeal by Virgin Media Ltd,
scheduled for 25 June 2024. The Group is monitoring the outcome of
the appeal, and any additional hearings, as well as confirmation
from the Government as to whether it will issue new regulations in
response to this issue.
-
Capital commitments
At 31 March 2024, the Group has
capital commitments of £9.9m (30 September 2023: £15.8m) for the
acquisition of new plant and machinery, primarily relating to
warehouse upgrades at the National Distribution Centre (NDC) in
Lutterworth, and new production lines at Rugby and Newcastle West
in Ireland.
-
Other reserves
The movement in the Group’s other
reserves was as follows:
|
Capital
redemption reserve
|
Hedging
reserve
|
Translation
reserve
|
Merger
reserve
|
Total
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
At 1
October 2023
|
2.7
|
2.6
|
(13.8)
|
87.3
|
78.8
|
Losses in the period in respect of
cash flow hedges
|
–
|
(12.8)
|
–
|
–
|
(12.8)
|
Amounts reclassified to the income
statement in respect of cash flow hedges
|
–
|
5.4
|
–
|
–
|
5.4
|
Deferred tax in respect of cash
flow hedges
|
–
|
1.5
|
–
|
–
|
1.5
|
Exchange differences on translation
of foreign operations
|
–
|
–
|
(8.5)
|
–
|
(8.5)
|
Tax on exchange
differences
|
–
|
–
|
(0.3)
|
–
|
(0.3)
|
Movements included within other
comprehensive income
|
–
|
(5.9)
|
(8.8)
|
–
|
(14.7)
|
Transfer of cash flow hedge reserve
to inventories
|
–
|
1.8
|
–
|
–
|
1.8
|
Transfer of cash flow hedge reserve
to goodwill
|
–
|
(0.5)
|
–
|
–
|
(0.5)
|
Shares cancelled pursuant to share
buyback
|
1.0
|
–
|
–
|
–
|
1.0
|
At 31 March
2024
|
3.7
|
(2.0)
|
(22.6)
|
87.3
|
66.4
|
|
|
|
|
|
|
|
Capital
redemption reserve
|
Hedging
reserve
|
Translation
reserve
|
Merger
reserve
|
Total
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
At 1
October 2022
|
0.9
|
27.3
|
(9.5)
|
87.3
|
106.0
|
Losses in the period in respect of
cash flow hedges
|
–
|
(30.4)
|
–
|
–
|
(30.4)
|
Amounts reclassified to the income
statement in respect of cash flow hedges
|
–
|
(6.1)
|
–
|
–
|
(6.1)
|
Deferred tax in respect of cash
flow hedges
|
–
|
7.3
|
–
|
–
|
7.3
|
Exchange differences reclassified
to profit or loss on disposal of foreign operations
|
–
|
–
|
(0.3)
|
–
|
(0.3)
|
Exchange differences on translation
of foreign operations
|
–
|
–
|
(3.9)
|
–
|
(3.9)
|
Tax on exchange
differences
|
–
|
–
|
(0.2)
|
–
|
(0.2)
|
Movements included within other
comprehensive income
|
–
|
(29.2)
|
(4.4)
|
–
|
(33.6)
|
Transfer of cash flow hedge reserve
to inventories
|
–
|
4.1
|
–
|
–
|
4.1
|
Shares cancelled pursuant to share
buyback
|
1.0
|
–
|
–
|
–
|
1.0
|
At 31 March
2023
|
1.9
|
2.2
|
(13.9)
|
87.3
|
77.5
|
Capital
redemption reserve
The capital redemption reserve
relates to the repurchase and cancellation of shares of the company
pursuant to the share buyback programme (see note 11). Upon
cancellation, the nominal value of shares cancelled is transferred
from share capital to the capital redemption reserve.
Hedging
reserve
The hedging reserve records the
effective portion of movements in the fair value of commodity
swaps, forward exchange contracts, interest rate and cross-currency
swaps that have been designated as part of a cash flow hedge
relationship.
Translation
reserve
The
translation reserve includes cumulative net exchange differences on
translation into the presentational currency of items recorded in
Group entities with a non-sterling functional currency net of
amounts recognised in respect of net investment hedges.
Merger
reserve
The merger reserve arose as a
result of the non-pre-emptive share placement which took place on
21 May 2010. It was executed using a structure which created a
merger reserve under Section 612-613 of the Companies Act
2006.
-
Assets held for sale
On 8 October 2020, contracts were
exchanged for the sale of the Britvic Norwich production
site (jointly
owned with Unilever) and the land and buildings (forming part of
the Group’s GB operating segment and previously presented within
property, plant and equipment) were classified as assets held for
sale under IFRS 5. This sale was subject to conditions precedent,
including certain planning consents being obtained by the buyer. An
important milestone was reached in August 2023 whereby the planning
application was validated by Norwich Council and the assets
continued to be presented as held for sale at 31 March 2024 as the
assets were available for sale in their present condition and the
sale was considered to be highly probable.
In line with IFRS 5, assets held
for sale are measured at the lower of carrying value and fair value
less costs to sell. The carrying value of the Norwich land and
buildings at 31 March 2024 is £16.8m (30 September 2023:
£16.8m).
-
Acquisition in Brazil
On 4 October 2023, the Group
acquired 100% of the issued share capital of GlobalBev Comércio de
Bebidas Ltda (GCB). This comprised of all the voting equity
interests and resulted in the Group obtaining control of GCB. The
acquired entity owns the Extra Power energy drink brand as well as
the energy brand Flying Horse, the juice brand Juxx and the acai
smoothie brand Amazoo. Collectively, this acquisition in Brazil
enables the Group to expand its brand portfolio and regional
footprint. The acquisition marks an important extension of
Britvic’s Brazilian operations, consistent with the Group’s
strategy to accelerate and expand its presence across
Brazil.
The consideration for the
acquisition comprises initial cash consideration of BR$151.1m
(£24.1m), deferred consideration of BR$70.0m (£11.4m, at exchange
rate on acquisition), due in instalments on the first and second
anniversary of completion, and contingent consideration of up to
BR$25.0m (£4.1m, at exchange rate on acquisition), subject to
performance criteria.
GCB contributed £11.5m of revenue
and a profit of £1.7m to the Group’s profit after tax for the
period between the date of acquisition and 31 March
2024.
The provisional amounts recognised
in respect of the identifiable assets acquired and liabilities
assumed are set out below:
|
4 October 2023
|
|
£m
|
Property, plant and
equipment
|
0.2
|
Right-of-use assets
|
0.4
|
Intangible assets
|
23.1
|
Inventories
|
1.8
|
Trade and other
receivables
|
2.0
|
Total
assets
|
27.5
|
|
|
Trade and other payables
|
(3.1)
|
Lease liabilities
|
(0.4)
|
Total
liabilities
|
(3.5)
|
|
|
Total
identifiable net assets
|
24.0
|
Goodwill
|
14.5
|
Total
consideration
|
38.5
|
Satisfied by:
|
|
Cash
|
24.1
|
Deferred consideration
|
11.1
|
Contingent consideration
|
3.3
|
Total
consideration
|
38.5
|
The net cash outflow arising on
acquisition was £24.1m.
The goodwill of £14.5m includes the
value of the assembled workforce as well as expected synergies
arising from the acquisition such as from integrating back-office
arrangements with the Group’s existing Brazilian operations and
from the sale of the Group’s existing brands in territories served
by the acquiree. All of the goodwill has been allocated to the
Group’s Brazil operating segment. It is expected that the goodwill
arising on acquisition will be tax deductible.
Intangible assets identified
separately from goodwill comprise trademarks of £16.1m related to
the Extra Power, Flying Horse, Juxx and Amazoo brands and customer
relationships of £7.0m.
Trade and other receivables with a
fair value of £2.0m have been recognised on acquisition. The gross
contractual amount of these receivables is £2.0m, all of which is
expected to be collected.
The Group measured acquired lease
liabilities using the present value of the remaining lease payments
at the date of acquisition. The right-of-use assets were measured
at an amount equal to the lease liabilities, reflecting that the
lease rentals are comparable to market rates.
The contingent consideration
arrangement is based on the sales volume growth of the acquired
energy drinks brands compared to the energy drinks market in Brazil
over the two years following acquisition, with potential payments
after each of the two years. The potential undiscounted amount of
all future payments that the Group could be required to make under
the arrangement is between £nil and £4.1m. The fair value of the
contingent consideration arrangement of has been estimated at £3.3m
and takes into consideration the likelihood of achieving the target
performance and discounting to present value. A reconciliation of
the fair value measurement of the contingent consideration
liability is provided below:
|
6 months ended
|
|
31 March 2024
|
|
£m
|
As at 1 October 2023
|
–
|
Liability arising on
acquisition
|
3.3
|
Unrealised fair value changes
recognised in profit or loss
|
0.1
|
As at 31 March
2024
|
3.4
|
In addition to the consideration
outlined above, acquisition and integration costs of £1.2m have
been incurred during the six months ended 31 March 2024. These are
included within administrative expenses and are presented as
adjusting items (see non-GAAP reconciliations on page
19).
-
Related party transactions
A full explanation of the Group’s
related party relationships is provided in the Group’s Annual
Report and Accounts 2023. There are no material transactions with
related parties or changes in the related party relationships
described in the last annual report that have had, or are expected
to have, a material effect on the financial performance or position
of the Group in the six month period ended 31 March
2024.
Appendix
1
NON-GAAP
RECONCILIATIONS
Adjusting
items
In addition to statutory financial
measures, the Group uses certain alternative performance measures
(APMs) which are not defined by adopted IFRS to assess the
operating performance and financial position of the Group. These
APMs excludes certain items, referred to as adjusting items, which
are not incurred in the ordinary course of business due to their
size, frequency and nature. These APMs are intended to provide
additional useful information on trading performance to the users
of the Financial Statements and are not intended to be a substitute
for IFRS measures.
For the 6 months ended 31 March
2024 these items primarily relate to the reversal of impairment of
trademarks, strategic M&A activity, costs for setting up the
Deposit and Return Scheme in Ireland & acquisition related
amortisation.
Adjusted KPIs are used to measure
the underlying profitability of the Group and enable comparison of
performance against peers. They are also used in the calculation of
short and long-term reward schemes.
|
Note
|
6 months ended
31 March 2024
£m
|
6 months ended
31 March 2023
£m
|
12 months ended
30 September 2023
£m
|
Reversal of
impairment of trademarks
|
(a)
|
3.6
|
–
|
–
|
Strategic
restructuring and M&A activity
|
(b)
|
(3.9)
|
(0.3)
|
(7.6)
|
Deposit Return
Scheme set-up costs in Ireland
|
(c)
|
(1.2)
|
–
|
(0.5)
|
Pension scheme
costs
|
(d)
|
–
|
–
|
(20.5)
|
Acquisition-related
amortisation
|
(e)
|
(5.8)
|
(4.3)
|
(8.3)
|
Total included
in operating profit
|
|
(7.3)
|
(4.6)
|
(36.9)
|
Ineffectiveness on
cash flow hedges related to debt
|
(f)
|
–
|
–
|
(1.5)
|
Unwind of discount
on deferred consideration
|
(g)
|
(0.5)
|
–
|
–
|
Total included
in finance costs
|
|
(0.5)
|
–
|
(1.5)
|
Total
adjusting items pre-tax
|
|
(7.8)
|
(4.6)
|
(38.4)
|
Tax on adjusting
items included in profit before tax
|
|
0.7
|
0.1
|
5.7
|
Net adjusting
items
|
|
(7.1)
|
(4.5)
|
(32.7)
|
-
Reversal of impairments of £3.6m related to the Ballygowan
trademark intangible following growth in sales and the successful
launch of Ballygowan’s Hint of Fruit range in the flavoured water
category. This was originally impaired in 2010, with partial
reversals in 2017 and 2018. Following the strong brand performance,
the remaining impairment has been reversed.
-
Strategic restructuring and M&A activity costs in the
period relate to the Norwich site running costs, cost attributable
to strategic organisational capability reviews and M&A costs
associated with acquiring and integrating GCB. FY23 costs were of a
similar nature, relating to a restructuring of supply chain and the
operating model across the Group initiated in 2016 and redundancy
costs in relation to additional production capacity within Kylemore
in Ireland.
-
Costs for the setup of the deposit return scheme (DRS) in
Ireland.
-
Pension scheme costs in the prior year of £20.5m comprise
past service costs on the GB defined benefit pension scheme
resulting from an amendment to the scheme rules related to pension
increases.
-
Acquisition-related amortisation relates to the amortisation
of intangibles recognised on acquisitions in Britvic Ireland,
Britvic France, Britvic Brazil, Aqua Libra Co, Plenish, Jimmy’s
Iced Coffee and GCB.
-
Ineffectiveness on cash flow hedges relate to hedge
ineffectiveness on private placement loan hedging.
-
In relation to deferred consideration payable for the
acquisition in Brazil (discounted to present value on
acquisition).
Adjusted
profit
|
6 months ended
31 March 2024
£m
|
6 months ended
31 March 2023
£m
|
12 months ended
30 September 2023
£m
|
Operating profit as
reported
|
93.1
|
80.7
|
181.5
|
Add back adjusting items in
operating profit
|
7.3
|
4.6
|
36.9
|
Adjusted
EBIT
|
100.4
|
85.3
|
218.4
|
Net finance costs
|
(14.9)
|
(11.4)
|
(24.7)
|
Add back: adjusting net finance
costs
|
0.5
|
-
|
1.5
|
Adjusted profit
before tax and acquisition-related amortisation
|
86.0
|
73.9
|
195.2
|
Acquisition-related
amortisation
|
(5.8)
|
(4.3)
|
(8.3)
|
Adjusted
profit before tax
|
80.2
|
69.6
|
186.9
|
Taxation
|
(18.3)
|
(14.9)
|
(32.8)
|
Less adjusting tax
credit
|
(0.7)
|
(0.1)
|
(5.7)
|
Adjusted
tax
|
(19.0)
|
(15.0)
|
(38.5)
|
Adjusted
profit after tax
|
61.2
|
54.6
|
148.4
|
Adjusted
effective tax rate
|
23.7%
|
21.5%
|
20.6%
|
Adjusted earnings
per share
|
6 months ended
31 March 2024
|
6 months ended
31 March 2023
|
12 months ended
30 September 2023
|
Adjusted basic
earnings per share
|
|
|
|
Profit
for the period attributable
to equity shareholders
(£m)
|
59.9
|
54.4
|
124.0
|
Add: net
impact of adjusting items
(£m)
|
7.1
|
4.5
|
32.7
|
Adjusted earnings (£m)
|
67.0
|
58.9
|
156.7
|
Weighted average
number of ordinary shares in issue for basic earnings per share
(millions)
|
248.1
|
258.6
|
256.9
|
|
|
|
|
Adjusted basic
earnings per share (pence)
|
27.0p
|
22.8p
|
61.0p
|
|
|
|
|
Adjusted diluted
earnings per share
|
|
|
|
Adjusted
earnings (£m)
|
67.0
|
58.9
|
156.7
|
Dilutive
shares on employee share schemes (millions)
|
2.0
|
1.6
|
1.9
|
Weighted average
number of ordinary shares in issue for diluted earnings per share
(millions)
|
250.1
|
260.2
|
258.8
|
|
|
|
|
Adjusted
diluted earnings per share (pence)
|
26.8p
|
22.6p
|
60.5p
|
Free cash
flow
|
6 months ended
31 March 2024
£m
|
6 months ended
31 March 2023
£m
|
12 months ended
30 September 2023
£m
|
Net cash flows
from operating activities
|
24.8
|
35.7
|
238.4
|
Purchases of
property, plant and equipment (net of government grants)
|
(29.4)
|
(25.5)
|
(68.5)
|
Purchases of
intangible assets
|
(3.5)
|
(3.9)
|
(8.1)
|
Interest paid, net
of derivative financial instruments
|
(14.7)
|
(9.3)
|
(21.1)
|
Repayment of
principal portion of lease liabilities
|
(4.2)
|
(5.0)
|
(9.0)
|
Repayment of
interest portion of lease liabilities
|
(0.9)
|
(1.0)
|
(1.9)
|
Free cash
flow
|
(27.9)
|
(9.0)
|
129.8
|
Adjusted net
debt
|
Note
|
31 March 2024
£m
|
Restated*
31 March 2023
£m
|
30 September 2023
£m
|
Interest-bearing
deposits
|
|
(6.1)
|
(6.2)
|
(10.9)
|
Cash and cash
equivalents
|
|
(29.8)
|
(41.8)
|
(79.2)
|
Overdrafts
|
|
29.2
|
23.0
|
48.9
|
Derivatives hedging
balance sheet debt
|
10
|
(12.8)
|
(21.6)
|
(22.6)
|
Interest-bearing
loans and borrowings
|
10
|
713.5
|
640.0
|
601.9
|
Adjusted net
debt
|
|
694.0
|
593.4
|
538.1
|
* Comparative figures for
interest-bearing deposits and cash and cash equivalents have been
restated as set out in note 2 ‘basis of preparation’