Britvic profits hit by restructuring costs – and claims workers are happier than last year
PUBLISHED: 15:55 29 November 2017 | UPDATED: 15:55 29 November 2017
Archant © 2017
Soft drinks giant Britvic has seen full-year profits tumble after it was stung by costs related to an efficiency drive.
The group, which is behind Robinsons squash and is proposing to close its factory in Norwich, said pre-tax profits fell 9% to £139m in the 52 weeks to October.
Profits were dragged down by Britvic’s three-year “business capability programme”, which cost £24.7m in the period.
As part of the cost-cutting drive, Britvic plans to close its Norwich production plant and move to sites in east London, Leeds and Rugby.
Under the plans, the Norwich site will close towards the end of 2019, though campaigners and unions have been fighting the proposals since they were revealed at the start of October.
In a statement with the accounts, chief executive Simon Litherland wrote: “We are fully committed to treating our employees fairly and with respect, and will be providing a full support package including redeployment, assistance to find jobs elsewhere and redundancy packages.”
Up to 242 jobs are at risk at Britvic, with a further 113 under threat at Unilever, its partner at the Carrow Works site.
If the closure goes ahead, Britvic would “benefit from reduced distribution costs” and be able to carry lower stock levels, said Mr Litherland.
The accounts also record Britvic’s commitment to “being a good employer and good neighbour” and note that its Great Place to Work Trust Index, a measure of how employees feel about working at Britvic, rose for the fourth consecutive year to 75%.
Revenues for the full year rose 8% to £1.54bn as the firm said it sold more than 2.3 billion litres of soft drinks in the year, an increase of 1.2%.
Shares rose more than 7% in morning trading to 819p as investors focused on the 5.1% rise in adjusted earnings to £195.5m.
But the group also warned over uncertainty linked to the government levy on sugary drinks, set to come in next year.
Mr Litherland said: “While April 2018 brings uncertainty with the introduction of the Soft Drinks Industry Levy in GB and Ireland, we are well placed to navigate it thanks to the strength and breadth of our brand portfolio and our exciting marketing and innovation plans.”
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