Britvic shares fall on costs warning

Britvic shares tumbled in afternoon trading after the soft drinks maker said it expected raw material costs to rise further.

Shares fell by more than ten per cent on the London Stock Exchange after Britvic said raw material costs are set to increase by 4.5 per cent.

The expected increase is above previous guidance and Britvic said it plans to offset the extra charge through cost cutting.

In addition, the soft-drinks maker said conditions in the licensed on-premise market will remain “challenging” and will deteriorate further.

Pubs are reporting lower drink sales, blaming the fall in consumer confidence and the ongoing effect of the smoking ban.

Chief executive Paul Moody said: “Looking forwards, although we anticipate rising input and energy cost pressures, our strong focus on cost control allows us to remain confident about the delivery of earnings in line with market expectations for the current year.”

Britvic reported still drinks sales growth of 7.8 per cent against a market decline of 1.2 per cent.

In carbonates, the company also outperformed the market with volume growth of 2.6 per cent against sector growth of 2.2 per cent, a result Britvic said was driven by a particularly strong Pepsi performance.