Britvic has revealed plans to slash costs by £30m a year as it reported a big increase in first-half profits.
The Pepsi bottler said it was aiming for £30m annual cost savings by 2016, and £25m savings by 2015.
To achieve the targets, it said two factories in Chelmsford and Huddersfield would be closed in the first quarter of 2014 and the GB and Ireland business would be combined under one management team.
The company also said it would close a warehouse in Belfast in the final quarter of this year.
From the money saved, Britvic said it would increase investment in its international business by £10m by 2015.
Fruit Shoot will be central to Britvic’s international plans. It is increasing distribution in the US to 32 states and has just signed an agreement with Narang Group to sell Fruit Shoot in India from next year.
Analysts welcomed the new strategy. “This provides the clearest indication that Britvic sees a strong future as a stand-alone entity,” said Panmure analyst Damian McNeela.
Meanwhile, Britvic reported a 51% increase in profit before tax to £37.5m for the 28 weeks ending 14 April, reflecting higher prices and lower commodity cost inflation. Sales edged up just 0.4% £639.2m.
“This has been achieved by growing our average realised price, a continued focus on cost and the substantial progress we have made in improving the underlying strength of our business,” said Britvic CEO Simon Litherland.
Britvic said the Competition Commission is expected to announce its verdict on the proposed merger with AG Barr by the end of July. It said the board will decide then whether a deal can be done in the interests of shareholders.
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