Britvic has warned its profits could be stifled by a “rapid and unprecedented” hike in raw material costs.
In a trading update today, the Robinsons and J20 maker said it had been hit particularly hard by increased prices of polyethylene terephthalate, used in its plastic bottles. The material is derived from oil and has risen in cost by 20% in the past month alone.
Steel and sugar prices had also dented profits and full-year input cost inflation was likely to be between 9% and 11%, the company said, up from the 5%-6% previously forecast.
Robinsons reported a 2.9% increase in GB take-home volumes in the four weeks to 22 January, with operating profits likely to be ahead of 2010 levels despite the economic headwinds.
“Since our last update to the market we have witnessed a rapid and unprecedented uplift in the cost of key raw materials,” said Britvic chief executive Paul Moody. “We do, however, remain confident about the medium to long-term outlook for the business.”
Natural focus to Britvic’s 7UP rebrand (29 January 2011)
Britvic warns of hit from its Irish ops (4 December 2010)