Saturday 21 August 2010

Britvic Plc. Thirst for Profit Growth


Britvic, one of Europe’s leading soft drinks producers, has had a tremendous last few years of growth. The company is expected by analysts to continue to grow earnings per share at a strong rate over the next few years. The company has grown its EPS from 19.71p in 2007 to 30.63p in 2009, a percentage gain of 55.4%, and is expected to report further growth of 9.95% to 33.68p this year. Cementing the company firmly as a growth company is the expectations that EPS will have increased to over 45.00p in 2012.

Using the earning figure expected for yearend Sep 2010 the company is priced on a P/E of 13.98, this may appear relatively quite cheap for a company that has earning growth expected to be near 50% in the next few years. Britvic’s recently expanded its business and European market exposure through the purchase of Fruité Entreprises SA , a independent soft drinks company in France for EUR237.0 million. This recent acquisition has expanded the drinks range and now includes Robinsons, J2O, Fruit Shoot, Tango and drench in GB, Mi Wadi, Energise Sport and Ballygowan in Ireland, and Teisseire, Fruite and Pressade in France. The Company also has exclusive bottling agreements with PepsiCo in the UK and Ireland for global brands such as Pepsi and 7Up.

Since the financial crisis of 2008 the share price has made a strong recovery. From the bottom of its trough to the peak of its rise (last month) it has risen 314% in about 2 years. The rising trend in this period has been quite defined and at the moment it is at the very bottom of this trend. If this trend is not broken downwards and a continuation is seen this may be a very successful investment opportunity.

No comments:

Post a Comment