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Full-year profits at Carlsberg took a hit as sales and volumes were held back by a change in the law in Russia restricting the size of plastic beer bottles.

Revenues at the Danish brewer fell 1% to DKK 61.8bn (£7.4bn) in 2017 as volumes crashed 14% in Russia – where the group generates about a fifth of its sales.

The fall is the result of a new law limiting the size of a plastic beer bottle to no more than 1.5 litres in an attempt to curb alcohol abuse in the country.

Pre-tax profits at Carlsberg more than halved in the year to DKK 3.5bn (£417m) after a DKK 4.8bn impairment of its Baltika brand in Russia due to “changed market dynamics” following the PET downsizing.

Group volumes were down 3% organically – mainly as a result of the fall in Russia – with a 4% decline in Western Europe, along with the disposal of German wholesaler Nordic Getranke and negative currency impact, seeing revenues in the region down 6% to DKK 17.8bn (£2.2bn).

Volumes in the UK dived 6% in 2017, which Carlsberg blamed on tough comparatives from 2016 when the European Foootball championships took place.

Overall Carlsberg reported organic net revenue growth of 1% for the year thanks to a 3% improvement in price and mix across its regions.

Despite a fall in total volumes, the brewer registered 3% growth for Tuborg, 1% for Carlsberg and 15% for Grimbergen. Craft and specialty volumes continued to soar, up 29%.

Organic operating profit growth came in at 8.4%, with reported growth of 7.7% to DKK 8.9bn.

Reported net profits fell from DKK 4.5bn to DKK 1.3bn, mostly as a result of the Baltika write down.

CEO Cees ’t Hart said: “We delivered a strong set of results for 2017, fuelled by disciplined execution of our efficiency programme – Funding the Journey – which we now believe will deliver around DKK 2.3bn, well above our initial expectations of DKK 1.5-2.0bn.

“During the year, we invested DKK 500m in our strategic growth priorities, which should lead to healthy and sustainable top- and bottom-line growth going forward.

“The earnings delivery and strong cash flow significantly reduced financial leverage. On this basis, we’re pleased that the supervisory board will recommend an increase in dividends of 60% to DKK 16, and by that reaching our target of a 50% adjusted payout ratio.”

Morning update

Tobacco giant Imperial Brands (IMB) has maintained its full-year guidance despite a massive hit from the collapse of wholesaler Palmer & Harvey.

The group said sales for the year were on track but were weighted towards the second half. It added that it continued to see further share gains in ‘growth brands’ and in the majority of its priority markets, building on the success of last year’s marketing investment programme.

“This is delivering a robust volume performance, reflecting overall share growth,” Imperial said.

Operating profits for the year will take a £160m hit from the administration of P&H last year, as already announced by Imperial following the collapse.

The strengthening of sterling is also expected to hold back net revenue and adjusted profits in the first half and full year.

Imperial said in the update ahead of today’s AGM that it was significantly stepping up the level of activity in Next Generation Products (NGP), with multiple launches in the next few months.

“We are prioritising e-vapour growth by further developing blu, which is currently available in the USA, UK, Italy and France. We are adding to blu’s growth potential in these markets and extending the brand into new markets, with the launch of a pod system, ‘myblu’.

“This is part of a significant portfolio development, improving the consumer experience and therefore conversion potential. The innovation strengths of our recently acquired business, Nerudia, are already adding to our exciting pipeline of developments that will continue to improve our consumer offering.”

The group added that launches of myblu were being finalised for France, UK, Russia and Italy and, by the end of the financial year, would will be available in at least 10 markets, with this figure set to double in FY19.

Shares are down 0.1% to 2,726.5p so far this morning.

The crash in world markets has come to a halt this morning, with the FTSE 100 back on the front foot, up 0.7% to 7,192.49 points.

Yesterday in the City

Ocado (OCDO) suffered heavy falls in its share price yesterday after the online group hit investors with a triple whammy of mixed news. Shares were down as much as 7% after the business slipped back into the red in the year to 3 December, warned that future earnings would be squeezed as it continued to invest heavily in a transformation from a grocery provider to a tech company and also revealed plans to issue millions of new shares in a placing to raise £150m. The stock ended the day down just 2.7% to 479p, which came on top of a 5% decline on Monday.

It was also a mixed day for the traditional supermarkets as Sainsbury’s (SBRY) declined 2.4% to 237.6p, Morrisons (MRW) slipped 1.8% to 213.7p and Tesco (TSCO) rose 0.7% to 200.2p. All the grocers showed robust growth in the past 12 weeks thanks to inflation according to the market share data from Kantar, but investors remained cautious about the sector. Tesco’s bump followed the fraud trial of former executives being abandoned. Marks & Spencer (MKW) was also in the red, down 1.5% to 288.5p.

The FTSE 100 crashed another 2.6% to 7,141.40 points and the panic on Wall Street continued. Index stalwarts such as Unilever (ULVR), Diageo (DGE), Imperial Brands and Associated British Foods (ABF), were all hit, down 2.8% to 3,836.5p, 2.4% to 2,415p, 2.4% to 2,732.5p and 2.4% to 2,614p respectively.