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Thu 21st Jul 2016 - Update: Fuller's, Britvic, AB InBev
Fuller’s reports 2.1% rise in managed like-for-likes: Brewer and retailer Fuller’s has reported a ‘solid start to the new financial year in a more challenging environment’, with like for like sales in managed pubs and hotels rising by 2.1% in the 16 weeks between 27 March and 16 July. Like for like profits in the tenanted division were down by 2%, while total beer and cider volumes in the Fuller’s Beer Company were down by 5%. The company stated: “Since the year end, the company has purchased The Gun, a stunning riverside pub on the edge of Canary Wharf with views across to the O2 Arena. This freehold pub has an excellent reputation for delicious fresh food, is one of London’s gems and is a fantastic addition to our Managed estate. The company has also opened the first London site for The Stable in Whitechapel, with a second on Kew Bridge due to open before the end of July. A number of transformational refurbishments have been carried out in the last 16 weeks including The Harpenden Arms in Harpenden, The Drayton Court in West Ealing and The Queen’s Head in Kingston, one of two transfers from tenanted to managed, which has been refurbished with the addition of ten bedrooms. In addition, the virtual freehold of The Butcher’s Hook & Cleaver, the Company’s existing and highly successful pub in London’s Smithfield, has been acquired.” Chief executive Simon Emeny said: “We have seen solid growth in our managed pubs business during the first part of the new financial year against tough comparatives from last year and despite some unseasonably poor summer weather and an uncertain economic and political environment. Fuller’s has always focused on building a business with genuine longevity and this ability to take a long-term view during short-term external pressures stands us in good stead. We have exciting plans in place and will continue to invest in our people, our premium brands and our pub estate.” The next report will be on 18 November 2016, when the company issues its half year results for the 26 weeks to 24 September 2016.

Britvic reports 5.3% Quarter Three sales rise: Britvic has reported quarter three group revenue of £346.3m, up 5.3% on last year. On an organic basis, revenue declined 0.7% to £326.5m. Chief executive Simon Litherland said: “Our Q3 performance was stronger than the first half of the year despite tough trading conditions and the wet weather in June. We have reported a 5.3% increase in revenue, with volumes up 8.8%. Organic volume has increased 1.4% whilst revenue has declined 0.7%. We have strong programmes in place for our brands over the balance of the year and remain on track to deliver full year Ebita within the guidance range we set at the beginning of the year of £180m to £190m. Looking ahead, the decision by the UK to leave the EU creates additional consumer and economic uncertainty whilst the weakening of sterling will place pressure on our input costs in GB. However, our strategy to leverage our market leading brands in our core markets, expand internationally, continue to invest in innovation and focus on cost control, means that we are well placed to continue to deliver our long-term strategic priorities and create value for our shareholders.” The company added: “The GB soft drinks market value declined 7.5% in June following a particularly wet month, resulting in a quarterly decline of 2.6%. Our Q3 GB revenue declined 2.0% with volume increasing 1.4% and ARP declining 3.4%, reflecting continued deflation and negative brand and channel mix. GB carbonates revenue increased 2.9% with a 4.7% volume increase partly offset by ARP declining 1.7%. Pepsi Max continued to outperform the market, gaining significant share in the quarter. GB stills revenue declined 10.2%, primarily due to an 8.2% volume decline. Robinsons performance improved on the first half of the year, despite still cycling the withdrawal of the added sugar range. Ireland revenue increased 10.6% with both Counterpoint and Britvic Ireland in strong growth. Both the carbonates and stills portfolio revenue increased during the quarter. Ireland has now delivered revenue growth in five of the last six quarters. In France, revenue declined by 2.0% as volume declined 1.7% and ARP declined 0.4%. This was principally due to a decline in the syrups range which was impacted by the poor weather in June. International revenue was flat on last year with the benefit of double-digit revenue growth in the USA offset by weaker sales in the travel and export markets, where trading conditions remained challenging. We have decided to withdraw from India, terminating our distribution agreement. Although Fruit Shoot has been received positively by Indian consumers we have decided to focus our resources on other markets that offer potentially higher returns in a shorter timeframe. Our Brazilian business has continued to gain market share and generated revenue of £19.8m, up 37% on last year on a comparable basis, despite a very challenging macroeconomic environment. The strong performance came from volume growth of nearly 20%, and price increases to recover raw material inflation.”

AB InBev gets US clearance for SABMiller deal: AB InBev has entered into a consent decree with the United States Department of Justice which clears the way for US approval of its recommended takeover of SABMiller. The company reaffirmed its expectation to close the global transaction in the second half of 2016. “With today’s agreement, we have taken a significant step forward on the transaction, which will create the world’s first truly global brewer,” said Carlos Brito, chief executive of AB InBev. “Our combination with SABMiller will bring more choice to more beer drinkers-and extend the global reach of our iconic American brands, such as Budweiser-in markets outside of the US.” As part of the consent decree and consistent with AB InBev’s approach to proactively address potential regulatory concerns, the company agreed to divest SABMiller’s US interest in MillerCoors to Molson Coors. This divestiture, which was previously announced between AB InBev and Molson Coors, is conditioned on the successful closing of the combination of AB InBev with SABMiller. Carlos Brito added: “We will continue to invest heavily in the US, including our efforts to build our entire portfolio of brands, support and incentivise our wholesalers, and compete effectively in a dynamic and fast-changing market. While we will make some adjustments to certain aspects of our US sales programs and policies, our fundamental approach and commitment to this market will not change. We will continue to compete and win in the US marketplace going forward.”

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