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Selling soft drinks to the cash-strapped consumers of the UK, Ireland and France is not an attractive proposition as the eurozone lurches into potential disarray.
Britvic, the company behind Robinsons squash and domestic bottler for PepsiCo, has neither the ballast of emerging markets nor deluxe whiskies that are enabling its bigger alcoholic peers to ride out the storm.
Add in April’s prolific showers and a time lag between price increases and higher input costs, and the first half was not pretty. Some of this will reverse out in the second half, when price rises should offset input inflation.
Optimists may even reckon the current bout of sunshine will be prolonged, and that, combined with the Jubilee and Olympics, we will all swill down more soft drinks.
But even allowing for the April slide in the share price, Britvic has outperformed the broader market year to date. Its discount to international peers, at about 40 per cent on price/earnings multiples according to Panmure Gordon, is well deserved given the state of the local consumer.
|28 weeks to April 15||% change|
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