Coca-Cola HBC fizzes on solid update
SHARES in Coca-Cola Hellenic
Bottling Company popped higher after analysts praised its first-half results.
Sales held up decently during the first half, although a switch to at-home drinking hit its bottom line.
The FTSE 100 group – which produces and distributes Coca-Cola Company drinks in Europe and parts of Africa – saw sales revenues slip 15.5pc to €2.83bn (£2.59bn) over the six-month period. Its profit before tax fell from €260.8m to €167.2m.
It said profits were knocked by lower overall volumes and a reduction in revenue due to a fall in out-of-home consumption. These pressures “were only partially offset by lower input costs and operating expenses”, and extra income from the group’s acquisition of Serbian confectionery brand Bambi, Coca-Cola HBC said.
Zoran Bogdanovic, chief executive, said: “Our strong performance on market share clearly demonstrates the power of our portfolio of brands and execution in the market; we will capitalise on this advantage now that we are seeing early signs of recovery.”
Analysts praised the results, which sent Coca-Cola HBC shares up 165p to £21.98. Citi’s Simon Hales said the group had seen increased momentum in July, and noted it was ahead of schedule with its cost-cutting efforts.
The FTSE 100 rose a moderate 1.1pc to 6,104.7, with a second-day drag from drinks giant Diageo, which fell another 98p to £26.23 after reporting Covid-hit results on Tuesday.
Miners performed strongly as data continued to point towards a recovery in the global economy – Evraz was the index’s second-biggest riser, up 26.7p to 321.9p. Other climbers included
Segro, which posted a surge in pre-tax profits for the six months to June as the pandemic pushed more consumers to e-commerce. The warehousing group’s shares rose 24.4p to 987.6p.
Legal & General climbed 1pc following first-half results. The insurer, up 2.9p at 223p, confirmed it will pay out a dividend at the same rate as last year, after results that showed first-half profits hit by the pandemic.
Royal Bank of Canada’s Gordon Aitken said he sees the flat dividend “as merely temporary and not an indication that growth will slow”.
On the FTSE 250, insurer Hastings jumped after it agreed to a £1.7bn buyout offer from Finland’s Sampo and South Africa’s Rand Merchant Investment, its top shareholder. Shares closed up 38p at 253p, roughly in line with the offer price.
Close behind was construction company Morgan Sindall, which soared 182p to £12.22 after reiterating its guidance for 2020. The group suffered a 62pc drop in pre-tax profit to £13.6m during the first half as a result of the virus.
Peel Hunt’s Andrew Nussey said the group’s performance had been “impressive” despite the drop.