Britvic takes £104m hit from Irish writedown

Britvic today slashed the value of its Irish business by £104 million to reflect the woes of the country's property crash and a banking crisis.

An accounting charge nearly halved the worth of a business Britvic spent £220 million to acquire. The soft drinks giant is left nursing a loss of £48 million for the year.

Ireland accounts for around 12% of group sales — a significant chunk of the business.

Chief executive Paul Moody was philosophical about the writedown and can point to other numbers indicating that the company is on firm footing.

In the 12 months to October, sales are up 14.6% to £1.14 billion, while profits jumped 21.5% to £109 million before the Irish charge was taken into account. That allows the group to up the dividend by 11% to 16.7p.

Moody reckons the acquisition of what is now called Britvic France in May for 237 million (£200 million) is already bearing fruit and he is eyeing other deals.

He has about £200 million to play with in cash, but is confident shareholders would be willing to raise more if a bigger deal was on the cards.

Moody will continue to look for new markets for leading brands such as Robinsons, Tango and Drench.

The pub trade, he says, is still challenging. "The top end retail operations that do food, the Mitchells & Butlers and Marstons, are showing some reasonable growth. At the bottom end, the wet-led boozers, are still finding it quite difficult," he said.

Altium Securities said in a note: "All told not a bad performance given the trading backdrop although the exceptionals are a bit larger than feared and the outlook remains challenging."