Last close As at 05/08/2026
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Market capitalisation
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Research: Consumer
As expected, Britvic witnessed strong growth during H1 in at-home channels and gained share in GB and Brazil, though restrictions continued to affect performance in the hospitality and on-the-go consumption segments. H1 revenue declined 6.3% on a like-for-like and constant currency basis, while adjusted EBIT was down 15.4% on this basis, and adjusted EPS was down 20%. The interim dividend has been reinstated at 6.5p per share. Management continued to focus on cash and cost efficiency to mitigate the impact of the pandemic as much as possible. Trading has been encouraging in the first weeks of H2 as lockdown measures have been eased in the UK. Planned investment will increase in H2 to capitalize on market opportunities and drive long-term growth. The mix is expected to improve as on-the-go consumption recovers and at-home growth moderates.
Written by
Britvic |
Optimistic about recovery
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Consumer |
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26 May 2021 |
Underlying £ price converted at £1.42/US$. Share price graph
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Business description
Bull
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Analysts
Britvic is a research client of Edison Investment Research Limited |
As expected, Britvic witnessed strong growth during H1 in at-home channels and gained share in GB and Brazil, though restrictions continued to affect performance in the hospitality and on-the-go consumption segments. H1 revenue declined 6.3% on a like-for-like and constant currency basis, while adjusted EBIT was down 15.4% on this basis, and adjusted EPS was down 20%. The interim dividend has been reinstated at 6.5p per share. Management continued to focus on cash and cost efficiency to mitigate the impact of the pandemic as much as possible. Trading has been encouraging in the first weeks of H2 as lockdown measures have been eased in the UK. Planned investment will increase in H2 to capitalize on market opportunities and drive long-term growth. The mix is expected to improve as on-the-go consumption recovers and at-home growth moderates.
H121 results
Reported revenue was down 11.7%, and down 6.3% on a like-for-like and constant currency basis. Adjusted EBIT was down 15.4% on this comparable basis, but down 20.6% on a reported basis, with adjusted EBIT margin down 110bp. Adjusted net debt was £94.3m lower year-on-year. The board has reinstated the interim dividend, following the suspension last year due to the pandemic.
Business demonstrates resilience and agility
Britvic has demonstrated its resilience with its response to the pandemic, and the changing consumer and customer trends that this has brought. Decisive action was taken early to mitigate the adverse effect of the pandemic on its financial performance. The balance sheet, with £587.3m of net debt at end H121, has peaked in terms of net debt/EBITDA and is now on a downward trajectory. There remains ample headroom and liquidity, and the sound financial footing will enable Britvic to invest with confidence in H2 to emerge strongly as the GB on-trade reopens.
Valuation: Discount should narrow
Britvic trades at a consensus FY21e P/E of 20.0x, a c 20% discount to the UK beverages sector (excluding Fever Tree) and a c 10% discount to AG Barr, reflecting its geared balance sheet and the fact some of its brands are part-owned by third parties. We believe those discounts should narrow over time with reducing balance sheet leverage, although in the shorter term COVID-19 uncertainty remains the biggest risk for the whole sector.
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Consensus estimates
Source: Refinitiv, company data |
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Research: Healthcare
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