CCEP attached caps

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Coca-Cola Europacific Partners (CCEP) is in advanced talks to buy the Philippino Coke bottler from the Coca-Cola Company in a deal that could be worth $1.8bn (£1.4bn).

The London-listed group signed a non-binding letter of intent with Coke - which is looking to sell its bottling operations - over the potential acquisition of Coca-Cola Beverages Philippines, but there was “no certainty” at this stage that a deal would complete.

CCEP has teamed up with Philippino conglomerate Aboitiz Equity Ventures for the potential joint transaction, based on a 60:40 ownership structure.

The deal would build on CCEP’s expansion into Australia, Pacific and Indonesia (API) in 2021 and position the group as the world’s largest Coca-Cola bottler by both revenue and volume.

Coca-Cola Beverages Philippines generated revenues of $1.7bn (£1.3bn) in the 2022 financial year, with pre-tax profits of $901m (£705m).

CCEP CEO Damian Gammell said Coca-Cola Beverages Philippines was “well-run” and had “attractive profitability and growth prospects”.

“This would be a natural next step for CCEP, creating a more diverse footprint within our existing API business segment, support Indonesia’s transformation journey and underpin our strategic mid-term objectives.”

Alongside the potential deal, CCEP announced “a great first half”, with strong top and bottom-line growth.

Revenues in the six months to the end of June increased 8.5% to €9bn (£7.7bn) thanks to price rises pushed through in 2022 and 2023, with volumes also up 1%. As a result, operating profits jumped 21% to €1.2bn (£1bn).

“Our performance reflects great in-market execution, strong customer relationships allowing our consumers to continue to enjoy our portfolio of leading brands across a broad pack offering,” Gammell said.

“This resulted in solid volume growth across our developed markets, whilst our volume in Indonesia reflected the execution of our long-term transformation strategy. Our focus on revenue and margin growth management, along with our price and promotion strategy, drove solid gains in revenue per unit case with transactions outpacing volume.”

He added the group remained confident in the resilience of its categories, with revenue and profit expectations for the year upgraded.

Morning update

Consumer healthcare giant Haleon has raised its sales forecast for the year after registering double-digit first-half growth.

Revenues at the Sensodyne, Panadol and Centrum owner increased 10.6% to £5.7bn, which included a 2.9% lift in volumes alongside price rises.

Adjusted operating profits rose 8.9% to £1.3bn, while reported profits were up 26.8% to £1.1bn.

Haleon, which spun out of GSK a year ago, upgraded organic revenue growth guidance for the year to 7-8%, up from towards the upper end of the 4-6% range previously.

CEO Brian McNamara said: “One year from listing, we are very pleased with Haleon’s first half results.

“Looking ahead, whilst we continue to expect a challenging environment given further pressure on consumer spending and global geopolitical and macroeconomic uncertainties, we remain confident in the resilience of Haleon’s incredible portfolio of category leading brands.”

Kerry Group has reported “a good performance” in the first half as revenues were boosted by price rises and acquisitions.

Group revenues increased 1.6% to €4.1bn in the six months to 30 June, with organic growth of 5.1%.

The rise reflected a small 0.6% lift for volumes, price hikes of 4.5% and contribution from acquisition of 1.1%, offset by asset disposals amounting to 4.5%.

The rise in volumes came entirely from the taste & nutrition division, which logged a 1.4% increase, while dairy Ireland fell 2.5% as elevated input costs impacted overall market demand dynamics.

Group EBITDA was broadly flat at €518m as organic growth was offset by the effect of the disposals of its sweet ingredients portfolio to IRCA.

CEO Edmond Scanlon said: “We delivered a good performance in the first half of the year recognising varying conditions across our markets.

“Strong volume growth was achieved in APMEA and Europe led by our performance in the foodservice channel, while North America saw customers work through elevated inventory levels. We continue to see good levels of customer innovation activity, and our margins reached an inflection point in the second quarter.

“We also made good strategic progress, particularly in executing on our emerging markets strategy with significant acquisitions and investments across APMEA and LATAM. With Kerry’s strong local footprint and track record of growth across emerging markets, these complementary strategic developments will support our future growth ambitions.

“While recognising current market conditions, we remain strongly positioned for growth and reiterate our full year constant currency earnings guidance.”

The FTSE 100 slumped 1% to 7,591.38pts this morning.

Haleon fell back 1.5% to 325p despite the raised forecasts, while Kerry slipped 0.5% to €90.28.

Early risers include Bakkavor, up 4.3% to 103.5p, Virgin Wines UK, up 2.8% to 35p, McBride, up 2.4% to 42p, Finsbury Food, up 1.6% to 96p, and Deliveroo, up 1.6% to 129.6p.

Alongside Haleon and Kerry, Just Eat Takeaway is down 2.3% to 1,309p and Ocado is 1.7% lower at 921.4p.

Yesterday in the City

The FTSE 100 fell 0.4% to 7,666.27pts yesterday.

AG Barr shares jumped 2.6% to 483.5p despite CEO Roger White announcing he was retiring from the Irn-Bru maker after 21 years at the helm. The stock received a boost following an upgrade to profit expectations for the year, with revenues up 33% in the first half.

Diageo also moved 0.4% higher to 3,411.5p after posting annual net sales growth of 11%.

Domino’s Pizza Group soared 13.7% higher to 395p as it raised profit expectations for the year.

Conversely, Greggs plunged 7.2% to 2,562p as margins remained underpressure. Investors were not moved by first-half sales growth of 22% and higher profits.