Soft drinks company Britvic said on Friday its full year results would be towards the top end of market expectations after favourable summer trading aided by hot weather and the World Cup.
Britvic shares, which floated at 230 pence last December and have underperformed the beverages sector by 13 percent since, rose 6.3 percent to 233.75 pence in early trading as brokers raised their forecasts.
A higher total ARP (average realised price) combined with the delivery of 10 million pounds of the cost savings programme ... is expected to result in improved margins and profits in the second half, Britvic said.
Growth in still drinks offset an ongoing decline in the fizzy drinks sector, said Britvic which sells Pepsi, Tango and Robinsons as well as its own brands. It reported branded revenue growth of 0.4 percent in the 20 weeks to September 3, with still drinks sales up 7.5 percent and carbonates down 5.8 percent.
That was better than Britvic's first half when stills sales fell 1 percent and carbonates were down 9 percent.
Britvic said that during its second half the carbonates market experienced very marginal growth helped by a hot July, a favourable impact from the World Cup, significant new product introductions and a high level of promotional activity.
The growth of still drinks had been driven by new products and a solid performance in the key categories of adult and juice drinks. Nonetheless, the total stills market continues to be led by categories such as pure juice where Britvic has yet to develop a presence, and water where Britvic has only recently entered the category.
Deutsche Bank, raised its forecast for Britvic's annual net profit by 3 million pounds to 38 million pounds, saying the trading update should provide some reassurance after both stills and carbonates showed an improvement in the second half.