Ballygowan pours water on Britvic Irish revenues
Lower sales of Ballygowan bottled water, and a continued fall in the sale of third-party alcohol brands to pubs drove a 1.6% drop in annual revenues at the Irish division of British drinks group Britvic.
Britvic Ireland generated revenues of £175.8m (€205.4m) in the 12 months to the end of September; down 1.6% on a constant currency basis from the previous year. The company’s brands include Ballygowan, MiWadi, and Club but it also distributes Pepsi and 7-UP products. A decline in full sugar versions of some of those drinks, in the aftermath of the sugar tax being introduced last year, played a minor role in the overall revenue decline.
Another factor was a drop in sales volume for Ballygowan, which compared to an exceptionally strong performance in 2018. However, the overall bottled water market was down from 2018’s heatwave-induced peak and Ballygowan performance picked up in the final quarter of the latest Britvic financial year.
A contraction in the Irish pub market, however, dealt the company a big blow. While Britivic is primarily a soft drinks provider, its Counterpoint wholesale division also sells third-party alcoholic drink brands to the on-trade in Ireland. Those sales continued to fall in the second half of the year, pulling down overall revenues.
“Despite the challenging comparator, our soft drinks sales were on a par with last year, but we saw a decline in our alcohol sales as the on-trade channel softened,” said Britvic Ireland managing director Kevin Donnelly.
While Britvic is focused on furthering its lower/no-sugar content drinks it did admit to taking a hit from not growing in the energy drinks market, which was the fastest growing segment of the Irish drinks market in the past 12 months.
“Britvic Ireland’s lack of scale in an accelerating energy drinks sector negatively impacted our overall share of the market,” said Mr Donnelly.
On a group-wide basis, Britvic grew revenues by 1.4% in its latest financial year to over £1.54bn. However, after-tax profit fell 31% to just under £81m.
“The decline in profits came as Britvic struggled with new laws over suppliers pay in France, which forced prices higher, and as it wrote down some assets in the country,” said Steve Miley, senior market analyst with London-based AskTraders.
“Sales of Britvic’s low sugar and fruit-based beverages are a bright spot in the report. This is an area we expect to see expand going forward given the current low sugar push in the UK and some European countries,” he said.
“While we anticipate conditions to remain challenging, we fully expect that we will make further progress in 2020,” said Britvic group chief executive Simon Litherland.
