Market Report: Coke bottler left feeling a bit flat despite fizzing numbers

Coca-Cola HBC is the second-largest bottler of The Coca-Cola Company brands

7 August 2014

Rising profits and better margins at a Coca-Cola bottling business couldn’t inject any fizz into the share price today as conflict in Russia and Ukraine continued to worry investors.

Coca-Cola HBC, the second-largest bottler of The Coca-Cola Company and its brands, revealed half-year results with second-quarter net profit up 6% on a year earlier and earnings up 8%. But signs of any improvement took a knock from comments about the outlook in places such as Russia.

Chief executive Dimitris Lois said in a statement that the “escalation of the geopolitical situation in Russia and Ukraine has affected consumer spending”, adding that “unemployment levels remain high and disposable income is still constrained” in many regions it operates in.

Mike van Dulken, head of research at Accendo Markets, commented that shares have already lost 25% so far this year and 35% from last September’s highs.

He said: “Management’s comments about a challenging outlook, foreign exchange headwinds and expectations that trading conditions are unlikely to improve during 2014” hurt the shares today and asked: “Have investors been bottling up too much frustration?”

The stock was bottom of the FTSE 100 and slid 41p to 1334p.

The wider market was still in the red and Alastair McCaig, market analyst at spread-better IG said: “The escalation of sanctions, coupled with looming interest rate decisions, has seen a shaky start. Traders are prepared for a day of disappointment.” The FTSE 100 fell 17.01 points to 6619.15.

Telecoms giant Vodafone bought Italy’s Cobra Automotive Technologies. It paid £115 million for the maker of burglar alarm parts and car-location technology but shares fell 1.75p to 196.15p.

Oil and gas services engineer Amec warned of a margin squeeze as the strong pound had an adverse impact on profit and it dropped 15p to 1074p.

Shoppers snapping up cheap birthday cards helped Card Factory to post a strong sales growth and delivered a 6.5p share price rise to 211.5p.

But the shares are still below its May float price of 225p — one of a raft of companies which listed this year but have still yet to make it past their offer price.

Sales at pub group Enterprise Inns were boosted by World Cup drinking and the business reported a 2.1% rise in third-quarter like-for-like net income and the shares lifted 1.8p to 121.1p.

Market Report: Coke bottler left feeling a bit flat despite fizzing numbers

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