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| Britvic to close two factories and warehouse with loss of up to 400 jobs | Britvic to close two factories and warehouse with loss of up to 400 jobs |
| (4 months later) | |
| Up to 400 jobs at Britvic in the UK and Ireland are under threat, after the maker of Robinsons squash and R White's lemonade said it would close two factories and a warehouse. | Up to 400 jobs at Britvic in the UK and Ireland are under threat, after the maker of Robinsons squash and R White's lemonade said it would close two factories and a warehouse. |
| The company, which employs some 3,300 people, is reducing its staff by up to 15% as part of an attempt to cut annual costs by £30m over the next three years. | The company, which employs some 3,300 people, is reducing its staff by up to 15% as part of an attempt to cut annual costs by £30m over the next three years. |
| Britvic's chief executive, Simon Litherland, said: "It's always difficult to make those sorts of decisions, particularly because it impacts people. We are committed to supporting people throughout the period but it's tough. We need to remain competitive." | Britvic's chief executive, Simon Litherland, said: "It's always difficult to make those sorts of decisions, particularly because it impacts people. We are committed to supporting people throughout the period but it's tough. We need to remain competitive." |
| The company is still waiting for the outcome of a Competition Commission inquiry into its merger with Irn Bru maker AG Barr, which effectively put the £1.4bn tie-up on hold. | The company is still waiting for the outcome of a Competition Commission inquiry into its merger with Irn Bru maker AG Barr, which effectively put the £1.4bn tie-up on hold. |
| Litherland said: "We must wait to see the outcome of that, at which time the management boards will see if they can agree terms of the merger." He expects to make an announcement in August, after the commission's ruling, which is due by the end of July. | Litherland said: "We must wait to see the outcome of that, at which time the management boards will see if they can agree terms of the merger." He expects to make an announcement in August, after the commission's ruling, which is due by the end of July. |
| For the time being, Litherland said he had to focus on going it alone. "We've laid out today a very clear strategy that will accelerate growth for Britvic shareholders. We need to run the business as a stand-alone business." | For the time being, Litherland said he had to focus on going it alone. "We've laid out today a very clear strategy that will accelerate growth for Britvic shareholders. We need to run the business as a stand-alone business." |
| Britvic announced a 51% increase in pre-tax profits for the first half, prompting analysts to question whether it needed to go ahead with the merger, if it is finally cleared. | Britvic announced a 51% increase in pre-tax profits for the first half, prompting analysts to question whether it needed to go ahead with the merger, if it is finally cleared. |
| Charles Pick at Numis said: "First-half results are amazing, especially given market conditions. With the new strategy and cost savings of £30m per annum there may be questioning of whether Barr Britvic Soft Drinks will still be created (assuming Competition Commission clearance)." | Charles Pick at Numis said: "First-half results are amazing, especially given market conditions. With the new strategy and cost savings of £30m per annum there may be questioning of whether Barr Britvic Soft Drinks will still be created (assuming Competition Commission clearance)." |
| Analysts have previously suggested AG Barr could walk away from the deal after GlaxoSmithKline said it was considering a sale of Ribena and Lucozade. Jamie Isenwater, analyst at Deutsche Bank, said: "The biggest danger is that AG Barr turns away now Ribena and Lucozade are on the table. That would be a deal that delivers the same scale benefits without the legacy issues of Britvic. That's got to be an option." | Analysts have previously suggested AG Barr could walk away from the deal after GlaxoSmithKline said it was considering a sale of Ribena and Lucozade. Jamie Isenwater, analyst at Deutsche Bank, said: "The biggest danger is that AG Barr turns away now Ribena and Lucozade are on the table. That would be a deal that delivers the same scale benefits without the legacy issues of Britvic. That's got to be an option." |
| Britvic said it would close a factory in Huddersfield, ending production of its Drench and Pennine Spring water brands to focus on Ballygowan mineral water, which is produced in Ireland. It will shut down a factory in Chelmsford, shifting some of its production to Leeds, while the production of Fruit Shoot will be transferred to facilities in Ireland and France. It is also closing a warehouse in Belfast. | Britvic said it would close a factory in Huddersfield, ending production of its Drench and Pennine Spring water brands to focus on Ballygowan mineral water, which is produced in Ireland. It will shut down a factory in Chelmsford, shifting some of its production to Leeds, while the production of Fruit Shoot will be transferred to facilities in Ireland and France. It is also closing a warehouse in Belfast. |
| As part of the new strategy, it will boost investment in the international unit by £10m a year by 2015. On Wednesday, Britvic announced an agreement with Narang Group to distribute Fruit Shoot in India from next year. It expects to set up a 10-strong team there to work on the deal. | As part of the new strategy, it will boost investment in the international unit by £10m a year by 2015. On Wednesday, Britvic announced an agreement with Narang Group to distribute Fruit Shoot in India from next year. It expects to set up a 10-strong team there to work on the deal. |
| Pre-tax profits jumped to £37.5m for the 28 weeks to mid-April, on revenues down 0.3% at £639m, helped along by the company upping the price of its drinks. Up to 80% of soft drinks are sold on promotion and Litherland said there remained room to improve the effect of those promotions. | Pre-tax profits jumped to £37.5m for the 28 weeks to mid-April, on revenues down 0.3% at £639m, helped along by the company upping the price of its drinks. Up to 80% of soft drinks are sold on promotion and Litherland said there remained room to improve the effect of those promotions. |
| Britvic also bounced back after an expensive recall of its Fruit Shoot drinks last year, owing to the botched introduction of new bottle caps. | Britvic also bounced back after an expensive recall of its Fruit Shoot drinks last year, owing to the botched introduction of new bottle caps. |
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