Sunshine and socialising see soft drink makers’ profits fizz
BANKNOTE printer De La Rue has warned over possible job cuts as it looks to ramp up cost savings after swinging to a loss and warning over full-year results for the third time this year.
Chief executive Clive Vacher told the PA news agency that moves to strip out another £12 million in costs under an ongoing overhaul will impact its workforce.
He said it was too early to say how many roles would be impacted or give further details. But he said the cost savings would be “global and right across the cost base”.
“It will have an effect on employment and that will, again, be on a global basis.”
Mr Vacher added that he would also look at “optimising” the group’s manufacturing sites further in the UK and worldwide, but stressed there were no immediate plans for closures, having already trimmed its banknote print locations from five down to four.
The group – which prints banknotes for the Bank of England and other central banks across the globe – slumped to a £15.9m loss in the six months to September 24, against profits of £10.9m a year earlier in results that come as it faces increasing pressure from activist shareholder Crystal Amber.
Its underlying earnings nearly halved to £9.3m from £17.4m a year ago and the group said it expects full-year adjusted earnings to slump to between £30m to £33m. This is down from £36.4m the previous year and lower than the £36m it previously guided for.
It said the group’s currency division had been knocked by falling demand as governments use up the stocks of banknotes built up during the pandemic, while countries are also facing pressure on public finances caused by the cost-of-living crisis.
Mr Vacher is hopeful of a turnaround in the currency business as soaring inflation in the UK and globally drives greater need for more banknotes, given that each note buys less and therefore more are needed for each purchase.
“We are seeing encouraging signs that inflation is driving banknote demand in places. However, it is too soon to know if this is the start of a trend and we are therefore planning prudently in the short-term,” the group said.
Crystal Amber, which has a 10% stake in the business, reiterated its call for De La Rue’s chairman Kevin Loosemore to resign ahead of a December 2 general meeting for shareholders to vote on the proposal.
Crystal Amber’s fund manager and investment adviser Ricard Bernstein wrote on Twitter: “Management fails to take responsibility. Instead blaming Crystal Amber ‘distraction’ for articulating shortcomings. Staff and shareholders are the losers here.”
SOFT drinks giant Britvic has revealed a jump in sales and profits as it benefited from the easing of pandemic restrictions and the hot summer weather.
The Robinsons and J2O maker said revenues grew by 15.5% to £1.62 billion over the year to September 30, compared with the previous year, amid increases in both price and sales volumes.
As a result, the firm saw pre-tax profits jump by 45.3% to £140.2 million for the year.
The company said strong growth was “in part due to the soft comparable in the first half of 2021 when lockdown restrictions impacted the hospitality channel and the good weather this summer”.
It therefore saw an improvement in hospi- tality as well as better retail sales.
Britvic told shareholders that Pepsi, 7UP and Tango saw double-digit sales growth over the year, led by low and no sugar products.
Elsewhere, J2O and Fruit Shoot sales increased by 32.3% and 15.1% respectively as they benefited from increased socialising compared with the previous year.
However, Britvic highlighted a “challenging” year for the Rockstar energy drink brand, which “continued to underperform” despite the company resolving supply chain issues from last year.
Bosses said the uncertain economic backdrop makes it “difficult to forecast consumer demand” in the short term.
With high inflation predicted for 2023, the company said it will continue to seek to mitigate any impact through cost-efficiency work to boost its pricing and promotions. Chief executive Simon Litherland said: “We have delivered excellent results, with strong growth in volume, revenue and profit, in the face of significant headwinds.
“Our strategy has momentum, delivering accelerated top-line growth through consistent execution across our portfolio of trusted brands.
“We recognise that there are significant inflationary pressures on our consumers, customers and suppliers, and we remain focused on mitigating costs in a responsible manner through efficiency initiatives and revenue management while continuing to invest in our brands, people, sustainability and infrastructure.”