Britvic plc: A Strong Performance in the Soft Drinks Market

Britvic plc, a leading soft drinks company, has reported a strong performance in the soft drinks market, with revenue increasing by 8.6% in 2024 compared to the previous year. The company's adjusted EBIT margin also increased by 60 basis points to 13.2%, reflecting an improvement in profitability. Profit after tax increased by 1.8%, and adjusted earnings per share (EPS) increased by 13.9%. Britvic's net debt to EBITDA ratio was 1.98x, indicating a manageable level of debt relative to its earnings.

Britvic's success can be attributed to several factors, including its strong portfolio of family favorite brands, such as Pepsi, Tango, Lipton, MiWadi, and Ballygowan. The company also experienced a step-change performance in Brazil, with established and acquired brands in high double-digit revenue growth. Britvic successfully scaled its new growth brands, such as Plenish, Jimmy's, Aqua Libra, and London Essence, to build scale in fast-growing categories. The company increased its advertising and promotion (A&P) spend by 30.9% to support long-term brand growth.

Britvic's operational highlights also include the addition of new growth capacity across its markets, with new lines in the UK, Ireland, and Brazil. The company continues to focus on healthier people by offering low-calorie drinks, with an average of only 21 calories per serve. Britvic also promotes a healthier planet through investment in decarbonization and water stewardship programs.

Britvic's financial performance is reflected in its income statement, with revenue of GBP 1.90 billion and profits of GBP 125.8 million in the last 12 months. The company's balance sheet shows a net cash position of -GBP 686.8 million or -GBP 2.77 per share, with cash and cash equivalents of GBP 65.4 million and total debt of GBP 752.2 million.

Britvic's dividend policy has contributed to its total shareholder return, with a dividend per share increasing from 0.216 in 2020 to 0.345 in 2024, representing a 59.31% increase over the five-year period. The company maintained a relatively high dividend payout ratio, ranging from 55.2% to 68.7% over the past five years. Britvic's dividend policy has been complemented by share buybacks, with a buyback yield of 3.13% in 2024.

In conclusion, Britvic plc's strong performance in the soft drinks market, driven by its portfolio of family favorite brands, successful expansion in Brazil, and investment in new growth brands, has contributed to its total shareholder return. The company's focus on healthier people and a healthier planet, along with its manageable debt levels and strong dividend policy, positions Britvic well for continued success in the soft drinks market.