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Norwich factory closure contributes to £35m one-off costs for Britvic

Entrance to the Norwich Britvic factory.
Picture: Nick Butcher

Entrance to the Norwich Britvic factory. Picture: Nick Butcher

Archant © 2017

Soft drinks giant Britvic will pay costs of between £35m and £40m as part of a programme of change which includes moving production from Norwich, a business update has revealed.

In its quarter one trading statement, which covers the company’s performance up to December 24, the Robinsons squash and Pepsi Max maker said turnover had increased 3.3% to £337.2m year-on-year, but the closure of its Bracondale factory would see it incur heavy costs in the short term.

However, Britvic said the business capability programme would see it transform its supply chain and deliver “significant cost and commercial benefits”.

In the UK Britvic’s GB division increased sales by 1% with Pepsi Max helping its carbonated drinks stable to a 4.9% rise, however the still drinks side of the business saw turnover decline by 6.6%.

MORE: ‘A real kick in the teeth to the city of Norwich’ - MPs react to Britvic factory closure

Britvic and site neighbour Colman’s maker Unilever will leave the Carrow Works site in 2019.

Organic revenue, which excludes the acquisition of Brazilian company Bela Ischia, was only up 0.7%.

In the UK Britvic’s GB division increased sales by 1% with Pepsi Max helping its carbonated drinks stable to a 4.9% rise, however the still drinks side of the business saw turnover decline by 6.6%.

The group also took a one off hit from the collapse of wholesaler Palmer and Harvey, which had a Brandon base.

Chief executive Simon Litherland said: “We have delivered a solid start to the new financial year, with group revenue growing 3.3% ahead of a strong first quarter last year.

“As we said at our preliminary results, the introduction of a soft drinks industry levy in the UK and Ireland brings a level of uncertainty, but we are well placed to navigate this given the strength and breadth of our brand portfolio and exciting marketing and innovation plans.

“In addition, our continued focus on revenue and cost management and the delivery of the final phase of our business capability programme means we remain confident of making further progress in 2018.”

Britvic announced a proposal to move production from Norwich in October and confirmed the decision in December with the loss of 230 jobs from the city.

The plan led site neighbour Unilever to reexamine its future in the county, where it produced Colman’s Mustard, with the Anglo-Dutch conglomerate announcing it would move most of its production to the Midlands and Europe in January.

The EDP and Norwich Evening News ran a campaign, which attracted more than 10,000 signatures in its first week, to keep both companies in the region.

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