Interim Results
Britvic plc
25 May 2006
Britvic plc
Interim Results (Unaudited)
(For the 28 weeks ended 16 April 2006)
28 weeks to 28 weeks to % change
16 April 2006 17 April 2005*
£m £m
Total Branded Revenue 323.5 341.5 (5.3)
Carbonates Revenue 159.8 175.6 (9.0)
Stills Revenue 153.7 155.2 (1.0)
EBITDA** 43.4 47.9 (9.4)
Operating Profit 18.6 22.7 (18.1)
Free cashflow*** (42.3) (69.8) 39.4
Profit after tax 6.5 9.6 (32.3)
Basic earnings per share 3.0p 4.3p (30.2)
Dividend per share 3.0p
------------------ ------------- ----------- ----------
Note: all numbers (other then revenue and dividend per share) are disclosed
before exceptional items and all numbers (other than dividend per share) exclude
the Private Label Water business - where the last contract expired in November
2005. Total revenue including Private Label Water is down 5.7% at £323.6m
against £343.1m in 2005.
* Proforma adjustments have been made to 2005 results to present them on a
comparable basis (as if the capital and corporate structure in place post
flotation had been in place throughout 2005). On a non- proforma basis 2005 H1
operating profit is £24.1m and profit after tax pre exceptionals is £16.8m.
** EBITDA is defined as operating profit before depreciation and amortisation
***Free cash flow is defined as net cash flow excluding dividends
• Total branded revenue in the seasonally less important first half is
down 5.3% to £323.5m and EBITDA down 9.4% to £43.4m reflecting:
o an unexpected decline since Christmas in the full sugar carbonate
market driven by an acceleration of the consumer trend towards health and
wellbeing
o the market volume growth in stills being driven by categories such as
Pure Juice and Water which Britvic has only recently entered
o revenue further affected by structural changes in the Take Home
customer base
o pricing and promotional issues with a small number of customers have
had a marked impact on stills revenue in the last few weeks of the period;
these have now been satisfactorily resolved.
• Market share maintained in many of Britvic's key categories including total
carbonates, adult and juice drinks.
• Interim dividend of 3.0p per share underpinned by strong and improving free
cash flow.
• Innovation launches announced at the time of flotation, including three new
water brands, successfully delivered on time.
• As previously announced, a further £4m of overhead savings identified in
addition to the £6m anticipated at the time of the flotation.
Paul Moody, Chief Executive commented:
'It has been a difficult first half with an unexpected sharp decline in the
carbonates market since Christmas, affecting both sales and profitability. Our
second quarter revenue was also impacted by structural changes in the Take Home
customer base, and our stills revenue was further affected by some short term
trading issues. These issues have since been satisfactorily resolved. Our total
sales performance has improved in the first four weeks of the second half with
stills revenue showing encouraging growth although carbonates revenue remains
down on the prior year.
We have not seen the level of recovery in the carbonates market that we
anticipated at the time of updating the market in April. This has led to some
downward pressure on pricing which we anticipate continuing for the balance of
the year. Consequently, management now believes that it will deliver earnings
for the full year modestly below the current range of market expectations but
the continued market volatility suggests that a range of outcomes is possible.
We remain confident in the prospects for longer term growth of the business due
to our strength in the important stills market, our track record of outstanding
innovation, the continued marketing support for our core brands and the strong
cash flow generated by the business.'
For further information please contact:
Investors:
John Gibney/ Jo Guano +44 (0)1245 504 330
Media:
Mike Smith/ Conor McClafferty +44 (0)207 404 5959
(Brunswick)
A presentation for analysts and investors will be held at 9.30am on 25 May 2006
at the Auditorium at Deutsche Bank, Winchester House, 1 Great Winchester Street,
EC2N 2BD. A live webcast of the presentation including Q&A will be available on
the Britvic plc website www.britvic.com
There will also be a conference call today at 2.30pm (9.30am Eastern Time)
primarily for US investors and analysts where there will be an opportunity to
ask questions. A recording of the call will be available for seven days. To
access this call please dial the access number below and use the pin number
given.
Access number +44 (0)20 8609 0205
Pin number 217348#
Redial number +44 (0)20 8609 0289
Conference reference 144612
Notes to editors
----------------
Britvic is one of the two leading soft drinks businesses in Great Britain. The
Company is the largest supplier of still soft drinks, the faster growing
category in the soft drinks market, and the number two supplier of carbonates.
Britvic plc's broad portfolio of leading brands includes established names with
high brand recognition such as Robinsons and Tango and highly successful
innovations such as J2O and Fruit Shoot. Included within the portfolio are the
Pepsi and 7UP brands, which Britvic produces, markets, sells and distributes
under its exclusive appointment from PepsiCo which runs until December 2023.
This brand and product portfolio enables Britvic to target and satisfy a wide
range of consumer demands in all major soft drinks categories, via all available
routes to market.
Cautionary note regarding forward-looking statements
----------------------------------------------------
This announcement includes statements that are forward-looking in nature.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company 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.
Chief Executive Review
----------------------
Britvic today announces a decline in half year sales and profits with total
branded revenue down 5.3 per cent to £323.5m and operating profits down 18.1 per
cent to £18.6m. Profits after tax and before exceptional items fell 32.3 per
cent to £6.5m and basic earnings per share are down 30.2 per cent to 3.0p. Free
cash flow has improved by 39.4 per cent and a dividend of 3.0p will be paid to
shareholders on the register on 9th June.
First Half Trading
------------------
In the first few months of 2006 the total soft drinks market changed
significantly as a consequence of a marked acceleration of the consumer trend
towards health and well-being. Against a market background of total carbonates
volume declining around 9 per cent in the first three months of 2006, Britvic's
brands have performed satisfactorily, maintaining market share in key categories
including total carbonates, adult and juice drinks.
Within this performance, non-added sugar variants have proved to be more robust
showing some small growth against a regular carbonates market in double digit
decline. In the first half therefore Britvic's carbonates volumes were down 7.2
per cent and Average Realised Price per litre (ARP) was down 1.9 per cent
resulting in revenue down 9.0 per cent.
The difficult trading environment in carbonates affecting the whole market is
resulting in intensified price pressure. There is increasing volatility in the
frequency and depth of promotional activity and this is also reducing volumes.
The pricing outlook for the remainder of the year therefore remains uncertain.
Conversely, the total stills market showed strong growth tracking almost 7 per
cent ahead of the 2005 volume trends. However Britvic's brands volumes in this
category were only marginally up on last year as a consequence of much of the
stills market growth being driven by products such as water, pure juice and
dairy where the Company does not have a developed presence. Britvic has however
launched a number of water products this year and the Company is focussing its
future new product development on many of these growth segments. Stills revenue
has additionally been impacted by price and promotional issues with two
customers. Although this has had a marked impact on revenue performance in the
last few weeks, the issues have now been satisfactorily resolved.
A further challenge in the first half of 2006 has come from structural changes
in the Take Home customer base. Changes in ownership have led to the sale of
stores and the implementation of different sales and promotional strategies,
resulting in a reduction in the size of some significant accounts.
Against this backdrop Britvic is focusing on the elements that can be directly
influenced and has further reduced costs and improved the cash position. Solid
progress has also been made on innovation and new product development.
Managing the cost base and improving the cash position
------------------------------------------------------
The overhead reduction programme is on course to deliver a further £4 million of
savings in 2006, in addition to the £6m anticipated at the time of flotation.
The annualised targets will therefore increase for 2007 and 2008 to respectively
£15m and £18m. These extra savings are as a result of the Business
Transformation programme, enabling costs to be reduced in a number of overhead
areas. In addition, a further £2m of savings from the Product Value Optimisation
programme in 2006 and a further £2m next year is expected as products are
re-engineered to further mitigate input price rises. These significant cost
savings, and the phasing of £3m of spend that was more front loaded last year,
have helped protect the decline at operating profit margin to less than 100
basis points over the period.
The guidance at the time of flotation was that the Company would be free cash
flow neutral at the end of 2006. Strong management action has led to an
improvement in the full year forecast position now being around £20-25m cash
positive. This has been achieved partly through reducing capital expenditure
levels in line with current market conditions - a reduction of over £10m to
£40-45m. In addition, improvements in working capital have been made as a result
of the increased visibility given by the new systems enabling reductions in
stock levels and improvements in supplier terms.
Whilst focus in the first half has been on reducing discretionary spend and
driving efficiency we have maintained the advertising and promotional spend to
support the brands within the portfolio. This spend, represents an investment of
over 7 per cent of revenue. As identified at the time of the flotation, spend in
the second half is allocated towards the growth segments of the market and
behind a mixture of core brands and new launch activity.
Innovation / New Product Development
------------------------------------
A number of new brands and brand extensions have been launched in the first half
of the year; all aimed at the growth segments of the market. All innovation
launches planned at the time of float have been delivered on time. Three new
brands, Drench, Pennine Spring and Fruit Shoot H2O have been successfully
delivered on time and are performing in line with management expectations. In
pure juice drinks, 'not from concentrate' Britvic Squeezed Orange and Pressed
Apple juices were launched into the On Premise market in May.
Carbonates non-added sugar variants continue to grow. Pepsi brand support has
hence been focused behind the low-calorie, sugar free variant Pepsi Max, the
launch of Pepsi Max Cino in January, and 7UP Free. We have also developed two
new flavours under the Tango Clear brand.
Innovation will be guided by the consumer trend towards health and wellbeing,
developing Britvic's significant presence in emerging and faster growing
categories including non-added sugar carbonates, adult, functional, sports
drinks and water. Britvic has a strong track record of successful innovation and
the Business Transformation Programme has enabled a reduction in the time taken
from concept to launch by one third enabling new products to be brought to
market more quickly.
Core Brands
-----------
Two of the major strands of the core brand activity in the second half revolve
around important sporting events. Pepsi is the official sponsor of Team England
for the World Cup starting in June. The promotional campaign is aimed at driving
Britvic's position in 'better for you' carbonates by taking Pepsi Max to the
World Cup through TV advertising, on-line PR support and consumer facing
promotions. Robinsons' association with Wimbledon is well established; however
this year Britvic will have the biggest campaign ever with coverage across the
Robinsons portfolio. The other major piece of core brand activity planned for
the second half is the 'Summer of Juice' campaign aimed at driving the
distribution and depth of the core Britvic juice range.
Britvic has a small International business whose key focus is on establishing
differentiated Britvic brands in Continental Europe. In the first half the focus
has been on establishing Robinsons in the Swedish and Danish markets through a
fully supported promotional campaign and on continuing the double digit growth
of the Fruit Shoot brand in Holland.
Current trading
---------------
Revenue performance has improved marginally in the first four weeks of the
second half, with total revenue down 4 per cent on last year, in the large part
impacted by the decline in the carbonates market volumes and the customer issues
which were resolved part way through the period.
The carbonates market continues to be challenging with the company showing a 14
per cent decline in this period compared with a market decline post Easter of 4
per cent. Removing the customer structural changes, carbonates revenues would
broadly be in line with the market. Stills revenue has shown encouraging growth
of 9 per cent, driven by J2O, Fruit Shoot and Robinsons. The water launches were
made part way through the period and have consequently had a limited impact.
Dividends
---------
The Company's core strengths and its strong underlying cash flow underpin the
Board's decision to pay an interim dividend of 3.0p per share. Given the
importance of summer to the business and the seasonality of Britvic's
profitability the Board broadly anticipates paying a third of the annual
dividend at this half year stage. This will be paid on the 7 July 2006 to
shareholders on the register on the 9 June 2006. On an ongoing basis the Board
intends to adopt a progressive dividend policy. The Board will take into
consideration the Company's cash flow as well as earnings in deciding the rate
of dividend growth and absolute level.
BRITVIC PLC
INTERIM FINANCIAL STATEMENTS
FOR THE 28 WEEKS TO 16 APRIL 2006
Company number: 5604923
BRITVIC PLC
INDEPENDENT REVIEW REPORT TO BRITVIC PLC
----------------------------------------
Introduction
------------
We have been instructed by the company to review the financial information for
the period ended 16 April 2006 which comprises the Consolidated Income
Statement, Consolidated Balance Sheet, Consolidated Cash Flow Statement,
Consolidated Statement of Changes in Equity, and the related notes 1 to 10. We
have read the other information contained in the interim report and considered
whether it contains any apparent misstatements or material inconsistencies with
the financial information.
This report is made solely to the company in accordance with guidance contained
in Bulletin 1999/4 'Review of interim financial information' issued by the
Auditing Practices Board. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company, for our work,
for this report, or for the conclusions we have formed.
Directors' responsibilities
---------------------------
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority.
As disclosed in note 1, the next annual financial statements of the group will
be prepared in accordance with those IFRSs adopted for use by the European
Union. This interim report has been prepared in accordance with the requirements
of IFRS 1, 'First Time Adoption of International Financial Reporting Standards'
relevant to interim reports.
The accounting policies are consistent with those that the directors intend to
use in the next financial statements. There is, however, a possibility that the
directors may determine that some changes to these policies are necessary when
preparing the full annual financial statements for the first time in accordance
with those IFRSs adopted for use by the European Union. This is because, as
disclosed in note 1, the directors have anticipated that certain standards,
which have yet to be formally adopted for use in the EU will be so adopted in
time to be applicable to the next annual financial statements.
The maintenance and integrity of the Britvic plc web site is the responsibility
of the directors; the work carried out by the auditors does not involve
consideration of these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the financial
information since it was initially presented on the web site.
Review work performed
---------------------
We conducted our review in accordance with guidance contained in Bulletin 1999/4
'Review of interim financial information' issued by the Auditing Practices Board
for use in the United Kingdom. A review consists principally of making enquiries
of group management and applying analytical procedures to the financial
information and underlying financial data, and based thereon, assessing whether
the accounting policies have been applied. A review excludes audit procedures
such as tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit performed in
accordance with International Standards on Auditing (UK and Ireland) and
therefore provides a lower level of assurance than an audit. Accordingly we do
not express an audit opinion on the financial information.
Review conclusion
-----------------
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the period ended 16
April 2006.
Ernst & Young LLP
Nottingham
24 May 2006
BRITVIC PLC
CONSOLIDATED INCOME STATEMENT
For the 28 weeks ended 16 April 2006
--------------- --------------- ---------------
(Unaudited) (Unaudited) (Audited)
28 Weeks 28 Weeks 52 Weeks Ended October 2005
Note Ended 16 April 2006 Ended 17 April 2005
--------------- --------------- ---------------
Before Exceptional Total Before Exceptional Total Before Exceptional Total
Exceptional items Exceptional items Exceptional items
items items items
£m £m £m £m £m £m £m £m £m
-------------- --- ------- ------ ------ ------ ------ ------ ------ ------ ------
Revenue 323.6 - 323.6 343.1 - 343.1 698.2 - 698.2
Cost of Sales (127.4) - (127.4) (130.1) - (130.1) (269.5) - (269.5)
-------------- --- ------- ------ ------ ------ ------ ------ ------ ------ ------
Gross Profit 196.2 - 196.2 213.0 - 213.0 428.7 - 428.7
Selling and
Distribution
Costs (118.0) - (118.0) (121.2) - (121.2) (232.3) - (232.3)
Administration
Expenses 6 (59.6) (14.6) (74.2) (67.7) (3.1) (70.8) (120.1) (5.8) (125.9)
------------- --- ------- ------ ------ ------ ------ ------ ------ ------ ------
Operating
Profit 18.6 (14.6) 4.0 24.1 (3.1) 21.0 76.3 (5.8) 70.5
------------- --- ------- ------ ------ ------ ------ ------ ------ ------ ------
Finance Income - - - 0.2 - 0.2 0.3 - 0.3
Finance Costs (9.2) (0.1) (9.3) (0.4) - (0.4) (6.5) (0.1) (6.6)
------------- --- ------- ------ ------ ------ ------ ------ ------ ------ ------
Profit /
(loss) before
Tax 9.4 (14.7) (5.3) 23.9 (3.1) 20.8 70.1 (5.9) 64.2
Taxation 8 (2.9) 2.7 (0.2) (7.1) - (7.1) (20.9) 0.1 (20.8)
------------- --- ------- ------ ------ ------ ------ ------ ------ ------ ------
Profit/(loss)
for the
period 6.5 (12.0) (5.5) 16.8 (3.1) 13.7 49.2 (5.8) 43.4
============= === ======= ====== ====== ====== ====== ====== ====== ====== ======
Earnings Per
Ordinary
Share 9
- basic for
profit/(loss)
for the
period 3.0p (5.6p) (2.6p) 7.8p (1.4p) 6.4p 22.9p (2.7p) 20.2p
------- ------ ------ ------ ------ ------ ------ ------ -----
- diluted
for
profit/(loss)
for the
period 3.0p (5.5p) (2.5p) 7.8p (1.4p) 6.4p 22.9p (2.7p) 20.2p
------- ------ ------ ------ ------ ------ ------ ------ -----
Dividend per
share paid
in the period
- Pence per
share 45.9p 270.4p 1,922.9p
------ ------ -------
Dividend per
share (proposed
after the balance
sheet date) -
Pence per share 3.0p
------
BRITVIC PLC
CONSOLIDATED BALANCE SHEET
(Unaudited) (Unaudited) (Audited)
16 April 17 April 02 Oct
Note 2006 2005 2005
-------- -------- --------
£m £m £m
---------------------------- ----- -------- -------- --------
Assets
Non-current assets
Property, plant & equipment 232.4 234.3 231.5
Intangible assets 95.1 99.8 96.7
Lease premiums 2.4 2.4 2.4
Deferred tax asset - 0.4 2.7
---------------------------- ----- -------- -------- --------
329.9 336.9 333.3
---------------------------- ----- -------- -------- --------
Current Assets
Inventories 37.3 38.5 37.9
Trade and other receivables 115.7 157.2 101.8
Forward currency contracts 0.2 - -
Cash and short-term deposits 1.2 2.9 19.4
Income tax receivable 5.7 5.8 -
---------------------------- ----- -------- -------- --------
160.1 204.4 159.1
-------- -------- --------
Total Assets 490.0 541.3 492.4
---------------------------- ----- ======== ======== ========
Equity and Liabilities
Issued capital 5 (43.2) (12.3) (12.3)
Share premium - (25.4) (25.4)
Own share reserve 0.5 - -
Share scheme reserve (5.7) (0.6) (0.8)
Other reserves - (7.2) (7.1)
Retained earnings 116.6 (150.3) 23.4
---------------------------- ----- -------- -------- --------
Total Equity 10 68.2 (195.8) (22.2)
---------------------------- ----- -------- -------- --------
Non-current liabilities
Interest-bearing loans and
borrowings 7 (354.2) - (219.3)
Deferred tax liability (7.1) - -
Pension liability (48.9) (82.2) (84.6)
---------------------------- ----- -------- -------- --------
(410.2) (82.2) (303.9)
---------------------------- ----- -------- -------- --------
Current liabilities
Trade and other payables (138.3) (179.5) (142.4)
Interest-bearing loans and
borrowings 7 (9.5) (81.0) (13.9)
Forward currency contracts (0.2) - -
Non-interest bearing loans and
borrowings - (2.8) (2.8)
Income tax payable - - (7.2)
---------------------------- ----- -------- -------- --------
(148.0) (263.3) (166.3)
---------------------------- ----- -------- -------- --------
Total Liabilities (558.2) (345.5) (470.2)
---------------------------- ----- ======== ======== ========
Total Equity and Liabilities (490.0) (541.3) (492.4)
---------------------------- ----- ======== ======== ========
BRITVIC PLC
CONSOLIDATED CASH FLOW STATEMENT
(Unaudited) (Unaudited) (Audited)
28 Weeks 28 Weeks 52 Weeks
Ended Ended Ended
16 April 17 April October
2006 2005 2005
-------- -------- ---------
£m £m £m
------------------------------------ -------- -------- ---------
Cash flows from operating activities
Profit from continuing operations
before tax and finance costs 4.0 21.0 70.5
Depreciation 20.5 21.0 40.8
Amortisation of intangible assets 2.5 2.5 3.0
Share based payments treated as
increase in equity 7.8 0.3 0.5
Net pension charge less contributions (29.4) (28.8) (27.0)
Decrease/(Increase) in Stock 0.6 (5.7) (5.2)
(Increase) in Debtors (11.9) (62.6) (7.3)
(Decrease)/Increase in Creditors (6.0) 29.7 (3.7)
Loss on disposal of property,
plant and equipment 1.8 1.7 3.2
Income tax paid (3.7) (16.6) (18.8)
-------- --------- ---------
Net cash flows from operating
activities (13.8) (37.5) 56.0
------------------------------------ -------- -------- ---------
Cash flows from investing activities
Proceeds from sale of property,
plant and equipment 0.2 - 0.1
Purchase of property plant and
equipment (27.6) (30.1) (51.8)
Interest Received 0.0 - 0.3
Acquisition of Subsidiary net of
cash acquired - (4.1) (4.3)
------------------------------------ -------- -------- ---------
Net cash flows from investing
activities (27.4) (34.2) (55.7)
------------------------------------ -------- -------- ---------
Cash flows from financing activities
Finance Costs (0.1) - (0.8)
Interest Paid (5.8) (0.2) (4.3)
Interest bearing loans received 364.4 81.0 233.2
Interest bearing loans repaid (233.9) - -
Repayment of borrowings (2.8) - -
Purchase of own shares (0.5) - -
Increase to share capital 0.2 - -
Dividend paid to equity holders of
the parent (98.5) (33.2) (112.1)
Dividend paid to minority interests - - (123.9)
-------- --------- ---------
Net cash flows from financing
activities 23.0 47.6 (7.9)
------------------------------------ -------- -------- ---------
Net decrease in cash and cash
equivalents (18.2) (24.1) (7.6)
Cash and cash equivalents at
beginning of period 19.4 27.0 27.0
------------------------------------ -------- -------- ---------
Cash and cash equivalents at
end of period 1.2 2.9 19.4
------------------------------------ ======== ========= =========
BRITVIC PLC
CONSOLIDATED STATEMENT OF RECOGNISED INCOME & EXPENSE
(Unaudited) (Unaudited) (Audited)
28 Weeks 28 Weeks 52 Weeks
Ended 16 Ended 17 Ended
April 2006 April 2005 October 2005
-------- -------- --------
£m £m £m
-------------------------------------- -------- -------- --------
Actuarial adjustments on pension
liabilities 6.7 (2.0) (3.4)
Current tax on actuarial adjustments
on pension liabilities 9.0 9.0 9.0
Deferred tax on revalued buildings - - (0.1)
Deferred tax on share options granted
to employees 1.1 - 0.4
Current tax on share options
exercised 0.6 - -
Deferred taxation on pension
liabilities (11.0) (8.4) (8.0)
Cost of share-based payments 7.3 0.3 0.5
Cash flow hedge gains taken to equity 1.0 - -
-------------------------------------- -------- -------- --------
Net income recognised directly in
equity 14.7 (1.1) (1.6)
(Loss) / Profit for the period (5.5) 13.7 43.4
-------------------------------------- -------- -------- --------
Total recognised income for the
period 9.2 12.6 41.8
Adoption of IAS 32/39 (1.0) - -
-------------------------------------- -------- -------- --------
Total recognised income 8.2 12.6 41.8
====================================== ======== ======== ========
BRITVIC PLC
NOTES TO THE FINANCIAL INFORMATION
For the period ended 16 April 2006
1. Basis of preparation
-----------------------
For all periods up to and including the year ended 2 October 2005, Britannia
Soft Drinks Ltd prepared its financial statements in accordance with UK
generally accepted accounting practice (UK GAAP). As a consequence of the
acquisition of Britannia Soft Drinks Ltd by Britvic plc and of that company's
listing on the London Stock Exchange, from 3 October 2005 the Group is required
to prepare consolidated financial statements in accordance with International
Financial Reporting Standards (IFRS) as endorsed by the European Commission.
The financial information has been prepared on the basis of standards that will
be applied by the year end under IFRS, including all International Accounting
Standards (IAS), Standing Interpretations Committee (SIC) and International
Financial Reporting Interpretations Committee (IFRIC) interpretations issued by
the International Accounting Standards Board (IASB) and published by 16 April
2006. These include IFRS endorsed by the EU and those awaiting formal
endorsement, as applicable to the 2006 financial statements.
These interim financial statements are unaudited and do not constitute statutory
accounts of the Group within the meaning of Section 240 of the Companies Act
1985. The Annual Report and Financial Statements for Britannia Soft Drinks Ltd
for the year ended 2 October 2005, under UK GAAP, which contain an unqualified
audit report, have been filed with the Registrar of Companies.
2. Transition to International Financial Reporting Standards
------------------------------------------------------------
IFRS 1, First-time Adoption of International Financial Reporting Standards, has
been applied in preparing these interim financial statements. The Group has
taken the following exemptions available under IFRS 1:
a) Not to restate the comparative information disclosed in the 2006
financial statements (being the financial statements for the 28 weeks to 17
April 2005 and the 52 weeks ended 2 October 2005) in accordance with IAS 32
'Financial Instruments: Disclosure and Presentation' and IAS 39 'Financial
Instruments: Recognition and Measurement'.
b) Not to restate business combinations occurring before 4 October 2004.
c) To recognise all actuarial gains and losses on pensions and other
post-retirement benefits directly in shareholders' equity at 4 October 2004.
d) To retain UK GAAP carrying values of property plant and equipment,
including revaluations, as deemed cost at transition.
e) Not to apply IFRS 2 'Share-based Payments' to grants of equity
instruments on or before 7 November 2002 that had vested prior to 1 January
2005.
Explanatory notes setting out Britvic plc's accounting policies under IFRS, the
major differences between UK GAAP and IFRS for Britvic plc and reconciliations
of UK GAAP to IFRS for the income statement for the year ended 2 October 2005
and Balance sheets as at 4 October 2004 and 2 October 2005 are included within
the Global Offer Price Range Prospectus issued in November 2005, available from
the website, www.britvic.com. The reconciliations for the 2005 interim period
included in this report are set out below.
Reconciliation UK to IFRS for Half Year '05
--------------------------------------------- ----------------
28 weeks to 17
April 2005
----------------
Profit for the period under UK GAAP 9.2
IFRS adjustments:
Goodwill amortisation 5.3
Share based payments (0.3)
Holiday pay accrual (0.6)
Deferred taxation 0.1
----------------
Profit for the period under IFRS 13.7
----------------
----------------
28 weeks to 17
April 2005
----------------
Shareholders' equity under UK GAAP 194.8
IFRS adjustments:
Goodwill amortisation 5.3
Pension costs (1.1)
Holiday pay accrual (0.6)
Deferred taxation 0.1
Land leases reclassified as operating leases (2.7)
----------------
Shareholders' equity under IFRS 195.8
----------------
3. Change of Accounting Policy : Implementation of IAS 32 and IAS 39
--------------------------------------------------------------------
As permitted by IFRS1 'First time adoption of International Financial Reporting
Standards' the Group elected not to present comparative information in
accordance with IAS 32 'Financial Instruments: Disclosure and Presentation' and
IAS 39 'Financial Instruments: Recognition and Measurement'. Therefore in the
restated information for the year ended 2 October 2005 and the half year 2005,
financial assets and liabilities are accounted for under UK GAAP.
Under UK GAAP, derivative financial instruments used for hedging purposes were
recognised by applying the deferral method, whereby gains and losses from
derivatives were deferred and recognised in earnings or as adjustments to
carrying amounts as the underlying hedged transactions matured or occurred.
From 3 October 2005 for IFRS all financial assets and financial liabilities have
to be recognised initially at fair value. In subsequent periods the measurement
of these financial instruments depends on their classification.
At 3 October 2005 the Group had forward exchange contracts and interest rate
swaps outstanding in relation to anticipated future cash flows. Hedges of cash
flows have been valued at the forward rates ruling at 3 October 2005. The
effects of adopting IAS 39 are shown as a restatement of the opening balance of
reserves as at 3 October 2005. The effects of the change in accounting policy on
the 2 October 2005 balance sheet would be as follows:
£m
Decrease in reserves (1.0)
Increase in current liabilities 1.2
Increase in current assets (0.2)
4. Segmental Reporting
----------------------
The directors consider that the Group has only one reportable geographic
segment, being the UK, and one business segment being the manufacture and sale
of soft drinks. The directors consider that the risks and returns of the Group's
products are similar in nature.
5. Issue of Share Capital
-------------------------
The Company was incorporated on 27 October 2005 with an authorised share capital
of £655,000,000 divided into 6,550,000,000,000 ordinary shares of £0.0001 each.
5,829,810 ordinary shares were allotted to Six Continents Investments Limited,
2,914,904 ordinary shares were allotted to Whitbread Group PLC, 2,914,904
ordinary shares were allotted to Allied Domecq Overseas (Canada) Limited and
613,664 ordinary shares were allotted to Wotsits Brands Limited, all issued at
par value of £0.0001 for cash. As a result, issued share capital on
incorporation comprised 12,273,282 ordinary shares totalling £1,227.
Since the date of incorporation, the following changes in share capital have
occurred:
On 18 November 2005 the Company acquired the entire share capital of Britannia
Soft Drinks Limited pursuant to a share exchange agreement dated 18 November
2005, in consideration of the issue to the shareholders of Britannia Soft Drinks
Limited of 4,295,636,424,718 ordinary shares of £0.0001 each.
On 18 November 2005 the entire share capital was consolidated in a ratio of 1
for every 20,000 shares. This resulted in a revised share capital of 214,782,435
ordinary shares with a nominal value of £2 each.
On 24 November 2005, the company's share capital was reduced by a court-approved
reduction of capital. The share capital of £429,564,870 divided into 214,782,435
ordinary shares of £2 each was reduced to 214,782,435 ordinary shares of £0.20
each, thus creating distributable reserves of £386,608,383 in the company.
There have been further smaller share issues relating to incentive schemes for
employees. As a result, issued share capital as at 16 April 2006 comprised
215,911,792 ordinary shares of £0.20 each, totalling £43,182,358.
6. Exceptional items before interest and taxation
-------------------------------------------------
Exceptional items are those items of financial performance that Britvic PLC
believes should be separately disclosed by virtue of size and nature to assist
the understanding of the financial performance achieved.
Year ended
Period ended Period ended 2 October
16 April 2006 17 April 2005 2005
---------- ---------- ----------
£m £m £m
----------------------------- ---------- ---------- ----------
Listing costs (5.4) (3.1) (5.8)
Incentive schemes directly
associated with the flotation (6.6) - -
Restructuring costs (2.6) - -
----------------------------- ---------- ---------- ----------
Exceptional costs (14.6) (3.1) (5.8)
----------------------------- ---------- ---------- ----------
'Listing costs' relates to various costs incurred in pursuit of the listing on
the London Stock Exchange which include advisors fees.
'Incentive schemes directly associated with the flotation' include all-employee
share schemes and management incentives.
'Restructuring Costs' includes the costs of the 'In shape for growth'
restructuring programme.
The exceptional costs incurred in the period to 17 April 2005 have been restated
compared to previously published proforma numbers to reflect additional costs
which were incurred in relation to the listing on the London Stock Exchange, but
which were not previously recognised in the income statement in that period.
7. Analysis of changes in interest bearing loans and borrowings
---------------------------------------------------------------
£m
------------------------------- -------------
Non-current liabilities (219.3)
Current liabilities (13.9)
------------------------------- -------------
At 3 October 2005 (233.2)
New unsecured bank loans (364.4)
Issue costs of new loans 0.1
Amortisation of issue costs (0.1)
Borrowings repaid 233.9
------------------------------- -------------
At 16 April 2006 (363.7)
------------------------------- -------------
Non-current liabilities (354.2)
Current liabilities (9.5)
------------------------------- -------------
8. Tax
------
The tax charge on profit before tax, excluding the impact of exceptional items
has been calculated using an estimated effective annual rate of 30.9%. After tax
on exceptional items, this leaves an estimated tax charge of £0.2m for the 28
weeks ended 16 April 2006.
9. Earnings per share
---------------------
28 weeks ended 28 weeks ended Year ended
16 April 2006 17 April 2005 2 October 2005
-------- -------- --------
£m £m £m
-------------------------------- -------- -------- --------
Basic earnings per share for
reported earnings
--------------------------------
Net (loss)/profit for the period
attributable to ordinary
shareholders (5.5) 13.7 43.4
-------------------------------- -------- -------- --------
Weighted average number of
ordinary shares in issue for
basic earnings per share 214.9 214.8 214.8
-------------------------------- -------- -------- --------
Basic earnings per share for
(loss)/profit for the period (2.6p) 6.4p 20.2p
-------------------------------- -------- -------- --------
Diluted earnings per share for
reported earnings
--------------------------------
Net (loss)/profit for the period
attributable to ordinary
shareholders (5.5) 13.7 43.4
-------------------------------- -------- -------- --------
Weighted average number of
ordinary shares in issue for
diluted earnings per share 218.4 214.8 214.8
-------------------------------- -------- -------- --------
Diluted earnings per share for
(loss)/profit for the period (2.5p) 6.4p 20.2p
-------------------------------- -------- -------- --------
Basic earnings per share for
pre-exceptional earnings
--------------------------------
Net (loss)/profit for the period
attributable to ordinary
shareholders (5.5) 13.7 43.4
Add: Net impact of exceptional
items 12.0 3.1 5.8
-------------------------------- -------- -------- --------
Net profit for the period
attributable to ordinary
shareholders (before
exceptional items) 6.5 16.8 49.2
-------------------------------- -------- -------- --------
Weighted average number
of ordinary shares in
issue for basic earnings
per share 214.9 214.8 214.8
-------------------------------- -------- -------- --------
Basic earnings per share for
pre-exceptional earnings 3.0p 7.8p 22.9p
-------------------------------- -------- -------- --------
Diluted earnings per share for
pre-exceptional earnings
--------------------------------
Net profit for the period
attributable to ordinary
shareholders (before
exceptional items) 6.5 16.8 49.2
-------------------------------- -------- -------- --------
Weighted average number
of ordinary shares in
issue for diluted
earnings per share 218.4 214.8 214.8
-------------------------------- -------- -------- --------
Diluted earnings per share for
pre-exceptional earnings 3.0p 7.8p 22.9p
-------------------------------- -------- -------- --------
10. Statement of changes in equity for the period ended 16 April 2006
---------------------------------------------------------------------
Called up Share Own Share Profit
share premium Share scheme Hedging Other and loss
capital account reserve reserve reserve reserves account Total
-------- -------- ------- ------- ------- -------- --------- ------
£m £m £m £m £m £m £m £m
At 3 October 2005 (12.3) (25.4) - (0.8) - (7.1) 23.4 (22.2)
Adoption of IAS 39 on 3
October 2005 - - - - 1.0 - - 1.0
-------- -------- ------- ------- ------- -------- --------- ------
At 3 October 2005 (Revised) (12.3) (25.4) - (0.8) 1.0 (7.1) 23.4 (21.1)
Reserve changes as a
result of IPO (30.7) 25.4 - - - 7.1 (1.8) -
Loss for the year - - - - - - 5.5 5.5
Issue of shares (0.2) - - 0.2 - - - -
Hedging gains - - - - (1.0) - - (1.0)
Actuarial gain on pension
scheme - - - - - - (6.7) (6.7)
Current tax on pensions
liabilities - - - - - - (9.0) (9.0)
Deferred tax on pensions - - - - - - 11.0 11.0
Deferred tax on share
options granted to
employees - - - - - - (1.1) (1.1)
Current tax on share options
exercised - - - - - - (0.6) (0.6)
Own shares purchased for
share schemes - - 0.5 (0.5) - - - -
Charge for share based
payments - - - (4.7) - - (2.6) (7.3)
-------- -------- ------- ------- ------- -------- --------- ------
Total recognised
income and expense for
the period (30.9) 25.4 0.5 (5.0) (1.0) 7.1 (5.2) (9.2)
-------- -------- ------- ------- ------- -------- --------- ------
Payment of dividend - - - - - - 98.5 98.5
-------- -------- ------- ------- ------- -------- --------- ------
At 16 April 2006 (43.2) - 0.5 (5.7) 0.0 - 116.6 68.2
-------- -------- ------- ------- ------- -------- --------- ------
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 34 minutes ago XPS Pensions Group
- 43 minutes ago Eneraqua Technologies
- 44 minutes ago Mountview Estates
- 53 minutes ago Thungela Resources Limited NPV (DI)
- 2 hours ago Johnson Matthey