Over 40 years’ heritage
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Britvic ups its game

Following the failed merger with AG Barr, Britvic has taken a long hard look at itself and changed for the better.

Having spent so much time and effort negotiating with Irn Bru maker AG Barr over a merger that didn’t happen, it was possible that Britvic could have taken its foot off the gas and drifted a little aimlessly. That has not been the case, however, as the breakdown in negotiations appears to have refocused management’s attention; the firm has made important steps to improving its exposure and profitability.

Britvic make a range of drinks in the UK such as Tango and Robinsons Squash, and also have a manufacturing agreement with PepsiCo to produce both Pepsi and 7 Up. In a reciprocal agreement PepsiCo are now to manufacture Fruit Shoots in America from 2014 for a 15-year term. The firm has also made moves to bolster its exposure in Europe – specifically Spain – and, from early 2014, India.

A combination of larger markets and improved profit margins, due to cost-cutting measures, has seen full-year operating profits jump almost 19% to £135 million from £112.7 million. If this sort of drive and improvement can be maintained, the shares could well outperform the very steady returns they have shown over the last couple of years.

Britvic chart

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