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Thu 23rd Jul 2015 - Update: Fuller's posts 5.7 LfLs, Britvic acquisition
Fuller’s reports LfLs up 5.7% in managed: Fuller’s has reported a strong start to the new financial year, with like-for-like sales in managed pubs and hotels rising by 5.7% for the period and like-for like profits in the tenanted division growing by 4%. Total beer and cider volumes in the Fuller’s Beer Company are level. Since the year end, the company has purchased a freehold pub in Earl’s Court Village, The King’s Head, opened The Stable in Plymouth and Winchester and carried out a successful relocation of The Stable in Bath. In addition, the freeholds of two existing leasehold sites have been purchased – The Blackbird in Earl’s Court, which has been a Fuller’s pub for over 20 years, and The Stable in Poole. In an AGM statement, Simon Emeny, chief executive, said: “The new financial year has started well and we are in robust health. We have exciting plans for the coming months with new openings for Fuller’s Inns and The Stable, as well as a continuation of our substantial programme of investment in our existing estate. In addition, the Rugby World Cup in the autumn – much of which takes place in our West London heartland – provides a focal point for some exciting activity and we are well placed to maximise its potential.” Numis Securities leisure analyst Douglas Jack, issuing an ‘Add’ recommendation and a 1,200p target price, said: “We are holding our forecasts, and believe forecast risk remains on the upside due to trading and expansion momentum. With net debt/Ebitda at 2.8x, there is scope for our expansion assumptions to be exceeded.”

Britvic buys Brazilian soft drinks firm Ebba: Britvic has bought an independent Brazilian soft drink firm, Ebba, for £120m. Ebba is the number one supplier of liquid concentrates and the number two supplier of ready-to-drink nectar drinks in Brazil. The transaction provides Britvic with immediate access to the sixth largest soft drinks market and the largest concentrates (dilutes) market globally. Britvic’s clear ambition is to at least double Ebba’s Ebitda and significantly grow margins by 2020. Under the terms of the acquisition, the enterprise value of Ebba is R$580m (£120.8m), with an effective acquisition cost of R$545.4m (equivalent to £113.6m), payable in two tranches. The acquisition will be partly funded from the proceeds of a placing of new ordinary shares. Simon Litherland, chief executive of Britvic, said: “The acquisition of Ebba represents a unique opportunity to acquire a high quality business in a substantial soft drinks market, with exciting future growth potential. Ebba operates in categories where Britvic has a proven capability of building new markets, accelerating innovation and establishing brand leadership. We have been in dialogue with Ebba for some time and have completed a significant amount of due diligence in assessing the value and prospects of the business and the wider marketplace. Ebba’s brands are particularly strong, and have a relevance to Brazilian consumers similar to the ones which Robinsons, MiWadi and Teisseire enjoy in their home markets. I am particularly pleased that the management team, led by João Caetano de Mello Neto, will continue to lead the business. We have identified opportunities to invest behind these leading brands, introduce new brands, and harness our group capability. As a result, we are confident we have a fantastic opportunity to drive long-term growth in the kids, family and adult categories and deliver significant shareholder value over the coming years.” Meanwhile, Britvic reported its quarter three trading performance for the twelve weeks to 5 July. Group revenue was £322.3m, an increase of 1.0% on last year. It stated: “This represents a solid performance in challenging trading conditions, and compared to last year when Q3 reported revenue grew 5.3. We remain confident of delivering Ebit in the previously stated guidance range of £164m to £173m.” Britvic is funding it Brazilian partly through a share placing to raise £90m.

SABMiller reports strong quarter In Latin America and Africa, challenging quarter in Europe: SABMiller has reported “good beverage growth” in Latin America and Africa in the quarter to 30 June, offset by declines in Europe in particular together with Asia Pacific and North America. Alan Clark, chief executive of SABMiller, said: “Both revenue and volumes grew strongly in Latin America and Africa in the quarter, tempered in particular by a challenging quarter in our key European markets where the trading environment remains difficult and softer volumes in China. We continue to make good progress in our strategy of driving top line growth which is reflected in the growth of revenue per hectolitre across our regions.” Of its European performance it stated: “In Europe, group NPR declined by 4% with beverage volumes down 6%, driven by a lager volume decline of 8% reflecting challenges in our key markets. In the Czech Republic and Slovakia, group NPR decreased by 6% with volumes down 8%, impacted by the timing of the Easter trading period as well as the recent major IT deployment. In Poland, group NPR declined by 17% with volumes down 15% in a weak beer market cycling a strong comparative prior year quarter. This was exacerbated by the delisting of our brands from a leading convenience chain and adverse price positioning of our brands relative to the competition. Group NPR decreased by 4% in the United Kingdom, where the continued growth of Peroni Nastro Azzurro was offset by declines in the Polish brand portfolio. In Italy, group NPR was up 1% with lower volumes offset by increased group NPR per hl due to firmer pricing. Across our remaining European subsidiaries, group NPR grew by low single digits. Our associate Anadolu Efes’ lager volume declined while group NPR per hl improved, driven by price increases and favourable mix. Continued weakness in lager volumes was predominantly driven by geopolitical uncertainty in Ukraine and a beer market decline in Russia.”

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