Soft drinks firm Britvic said on Wednesday its full-year adjusted core earnings rose 5.1 per cent, but warned that the introduction of a soft drinks tax in Britain and Ireland would create uncertainties in the sector.
Britain is set to implement a levy on makers of sugary drinks, a move advocated by health campaigners arguing that fizzy drinks are a source of empty calories. But the industry is opposing the tax, saying that it will not work and will disproportionately hurt poorer people.
The tax is due to come into force in April 2018, giving soft drinks makers such as Britvic and Coca-Cola European Partners time to reduce sugar in their products.
Britvic, which makes Robinsons squashes as well as J2O and Tango drinks, has already been cutting sugar content in drinks sold in Britain, but analysts have said the company will need to raise prices to cushion the impact from the higher taxes.
Chief executive Simon Litherland played down the fears, saying the company was well placed to navigate the uncertainties related to the tax.
“Ninety-four per cent of our own brands will be unaffected by the sugar levy,” he said.
Britvic, whose main markets are Britain, Ireland and France, said adjusted earnings before interest, taxes and amortization (EBITA) rose to £195.5 million (€218.3 million).
Successful management of cost inflation through revenue management and cost control drove EBITDA, Jefferies said in a note.
The company said annual profit after tax fell 2.5 per cent to £111.6 million.
-Reuters
