Cott Corporation acquired Eden Springs in June. © Philippe Krauer/Eden Springs
The acquisitions of Eden Springs and S&D Coffee have contributed to growth of 7% in Cott Corporation’s adjusted pre-tax earnings, which amounted to $87 million last year, the company’s fiscal full-year results have shown.
Cott acquired European water delivery company Eden Springs last June for €470 million, followed by a $355 million deal for American coffee roaster S&D Coffee.
Its full-year results, published today, also show that the acquisitions have caused reported pre-tax earnings to fall from $69 million to $60 million due to the increased cost of acquiring and integrating the two businesses. Cott said that ‘unrealised non-cash hedge losses’ also contributed to the 13% decline.
The drinks manufacturer also reported a 10% increase in revenue from $2.9 billion last year to $3.2 billion this year.
Its gross profit increased 20% to beyond $1 billion, compared to $896 million in the previous year. Its gross profit margin as a percentage of revenue increased to 33.2%.
Cott chief executive officer Jerry Fowden said: “I am pleased with the progress made in 2016 towards a more diversified, higher-margin, cash generative business. Our adjusted free cash flow generation of $150 million despite almost $20 million of adverse foreign exchange impact demonstrates the progress made during the year.
“We believe our focus on free cash flow generation and the platform we are creating in home and office services for water, coffee and tea will provide strong annual growth in free cash flow over the coming years.”
Revenue in Cott’s water and coffee business, which now includes Eden Springs and S&D Coffee, increased 89% to $483 million. The growth, it said, was primarily driven by the two acquisitions and supplemented by its Aquaterra business unit.
In its traditional business, Cott North America reported volume growth of 2% in actual cases, due mainly to 10% growth in value added and sparkling water products, which offset general market declines in carbonated soft drinks and private-label shelf-stable juices. Revenue was lower by 2% at $299 million because of ongoing product mix shifts within the business as well as the continually competitive nature of its trading environment.
© FoodBev Media Ltd 2017