Through understanding the company operations, the study will manage to analyses how the company identifies and manages both risk factors. The report opens up with a vivid highlight on the enterprise. It identifies the company external and internal variable. The major variables being on the size, industry market share, key markets of the company. It studies its raw material source and on its turnovers. Forming the first part also is the financial trends in the company over a five year period. Financial trend analysis represents a detailed analysis of the financial statement of an organization.
Its bases its report on a continuous allegations, finding on financial analysis highlights the direction of a concern. It highlights the availability of resources to complete projects on preposition (Bib 2012). Focus of the company on an international level is also evident in the study paper. On an international level, the paper focuses on corporate and financial actions, relating both to the global nature of the company. It highlights the significant developments over the recent years. It has a focus on the critical areas of strength and weaknesses in the Britain Group.
The study on the weaknesses and strengths has reference to areas such as competition agree, financial and geographical location. The second part analyses in a deeper perspective the exchange rate risk and country and political risk. Analysis of the findings is in the Britain group. Discussion and analysis are in highlight from the findings. The research closes on a conclusion on the company studies. Company description Size of company, market share and source of raw material Britain group is a manufacturer of soft drinks in Europe. It has its operations in the Great Britain, France and Ireland.
The company operates in five segments KGB Stills-United Kingdom with exclusion of Northern Ireland. KGB Crabs;lignite Kingdom, Ireland- including Republic of Ireland and Northern Ireland, France and the International market. It has the ranks as one of the leading soft drinks in the region of Europe. Britain group in its strategic brand creation in the three markets have developed a substantial portfolio on its soft drink brands. Its brands include Robinsons, drench, Tango, JAW, Midi, Ballyhooing, Testier and Fruiter. The group also deals in the production and sale of Pepsi Company soft drink in Great Britain and Ireland.
This generation and distribution line is through n agreement with the Pepsi group of company. Pepsi Co drinks include Pepsi, JP, and Mountain Dew Energy drink. The Britain group forms the largest supplier of branded still soft drinks. It also number two supplier in the carbonated soft drinks in Great Britain. In Ireland and France, it forms the leading group in the carbonated soft drinks industry. On the international level the company exports in more than 50 countries. Its headquarters is in Hummel Hempstead, the United Kingdom. Franchise partnership are in countries such as USA Australia and India.
Britain company sales volume in he United Kingdom stands second to the Coca-Cola. In an aim to create one leading company in the soft drink industry in Europe. The Britain group is in agreement to merge with A. G. Barr in an all-stock deal. The deal is a El . 8 merger deal. Among the main competitors in the soft drink, industry is Coca- Cola Company, Nicholas PL and SSH Group LTD. Britain holds an enviable position of number one supplier of still soft drinks and mom-premise soft drink in the ASK. Its market worth is EYE billion and holds a 17% market share. Britain Company sources its raw materials in a responsible and sustainable manner.
The program has the ability to minimize usage of the raw materials and re-use where possible. It sources its raw materials from ingredients such as barley, fruit juice and vitamins. The source is all over the world. The suppliers are all trusted on the ingredients for the manufacturing process. Corporate and Financial action and Competitive analysis Growth through franchising, licensing, and exporting has seen the group grow its market share in foreign territory particularly United States. Listing in the great London Stock Exchange as VIC the management team has brags n a strategic growth and expansion to international levels.
Its brand is in more than 50 international countries. The group is also a constituent of the FETES 250 Index. It maintains a stable customer base through building high scalable brands. The management of the Britain is under Gerald Corbett being the Non- Executive Chairman of the company since the November Of 2005. Gerald chairs the Britain Nomination Committee and is a member of the Britain Remuneration Committee. The management strategy is engraved in the company vision to be one of the most admirable soft drink enterprise in the world (Foster 2015). Its strategy capitalists on the business opportunity available to the company.
It is with an aim to maintain efficient operations and commercial excellence in both its brand and the Pepsi Co-brand of soft drinks. Its exploits its target market in three faces, the kids, family and adult sub-sectors. Operations of the group are to be simple and in focus towards operational model. The model empowers the personnel, matching the growth opportunity to the group resources and capabilities (Filial 2011). It is in and fosters its establishment on integrity and responsibility in the region Of its operations. Britain company sales volume in the United Kingdom stands second to the Coca-Cola.
It aims to create one leading company in the soft drink industry in Europe. To achieve the target it is in agreement with A. G. Barr on a merger in an all-stock deal. The deal is a El . 8 merger agreement. Among the main competitors in the soft drink, industry is Coca-Cola Company, Nicholas PL and SSH Group LTD. In the recent past expansion program are on a EYE million investment on a bottling site. In an aim to expand market share it signs a deal in February of 2015 with Tough Muddier to push Fruit Shoot lovably. Its marketing mix has incorporate sports to increase sales.
Financial trends over five years The group performance of its trading is on a quarterly management statement. The financial year 201 5 reflects a challenging condition in the panel’s core markets. The January report the December of 2014. The revenue stands at 304. 3 M Euros; it was down 0. 4% as in comparison to the last years. It is in a derivation from a marginal volume decline of 0. 3%. Great Britain revenue has decreased by 1. 4%. It was due to a competitive promotional environment. In Ireland, the IQ revenue grew 2. % and a similar growth of 2. 3% in France on the IQ income. On the international market, the IQ revenue declined 3. %. It was attributed low export volumes in the market. The turnover stood at 7. 12, a fall from 2013. The end of the year 201 3 on its financial statement highlights a growth in revenue of its three principal markets. Great Britain revenue hits a 1. 5% growth, France on a 4. 7%, and Ireland on a 2. 1 The international market revenue also grows on a 5. 6% mark, driven by both price and volume growth. The years turn over stood at 7. 81 , a rise from 2012. A report on January 201 3 indicates the year 201 2 trading performance. The years also marks a growth at end year with the group revenue growing at 4. %. Great Britain and France revenues also increased 5. 4% and 4. 3% respectively. The Ireland revenue at end year declined 2. 8%. The decline is attributed to a third party distribution on a product through their group wholesale business. Turnover stood at 7. 79, a drastic rise. The statement of year-end 2011 sees Great Britain take-home channel share gain. The revenue growth is in Great Britain by 2. 8%; France grew by 12. 6%. Internationally the revenue growth was 1. 7%. Revenue on the Ireland market declines by 1 attribution’s was on the promotional intensity and adverse mix.
According to the Chief Executive, the year marks an active and aggressive market completion. Turn over stood at 7. 33. The year 201 Sis a period where adverse weather condition affects the trading Of the group. The most prone were the pub and Club channels. Great Britain challenges the status and growth revenue is on 0. 8%. On the international market, the growth was on a 41. 5%. The France market that was in acquisition in the previous year 2010 (B. R. Kumar 2012). In line with the expectation, the roof it posts a quarterly revenue growth in excess of 5% and turn over are at 7. 37 a fall from 8. 40 in 2009.
The start of the year 201 3 Britain Group announces the on the agreement with the PepsiCo Americas Beverages. It was an agreement by Britain to accelerate the distribution of Fruit Shoot to a total of thirty states in the United States; a period limit was by the summer of 2013. The PepsiCo South West Europe was also to commence in early spring 2013. It was to deal with the national distribution of fruit shoot in Spain (Scrappier Francis 2013). The same year saw a merger with A. G Barr Pl on reaching shareholders’ approval. The merger also awaited the approval by the Office of Fair Trading (Macdonald 2014).
Chat 1: Britain performance since 2006. Year Net revenue (E M) Volume (M liters) Net profit(ME) Total Equity(E M) 2013 1,321. 9 2,066. 9 135. 0 82. 6 40. 9 2012 I , 256. 4 2,074. 8 112. 7 62. 9 37. 1 201 1 1 ,256. 4 2, 158. 6 77. 9 22. 5 201 0 1,980. 4 129. 6 76. 8 -30. 7 2009 978. 8 1,747. 4 110. 1 64. 2 -2. 5 Chat: Financial information of Britain Company EXCHANGE RATE RISK The exchange rate risk is a risk associated with an investment value changing, TTS primary cause change in the currency exchange rates. The risk forces the investor to close out on a short or long position in a foreign currency at a loss.
Britain has an exchange market size of 3000. The loss is due to the adverse movement in the exchange rate. The exchange rate risk will affect both the businesses dealing in exports or imports as well as the international investors, trading activities in the global market forces currency conversion. Changes in the currency exchange rate will cause the investment value to decrease or increase. It takes place when the investment is sold and inverted back into the original currency (Bantu 2012). The group experiences foreign exchange risk on its cash flow and net debt.
In the year 2014 the underlying free cash flow was at EYE. Mm inflow, it compares to the El 03. Mm inflow of the previous year. This marks a slight fall in the inflow of money in the group. The capital expenditure in the company was at a higher margin of EYE. 4 m than the previous year. It was attributed to the implementation of the strategic initiatives. The overall adjustable net debt reduced by a margin of over EYE m. Leverage to a 1. 9 times on the EBITDA as n comparison to the 2. 2 times on last year. The adjustable net debt fell from Emma to IEEE. Mm on September 2014.
The net debt takes into account the foreign exchange movements on the derivate hedging the companies US Private Placement debt. The financial risks involving the group are identified by a central treasury department. The activities of the treasury are in accordance with the board-approved policies. They are also subject to the regular Audit and Treasury Committee reviews. The operations of the department are not as a profit centre and no trading, or speculative transaction can take place. The department not only manages the foreign exchange risk but also administers the movement in interest rates.
The two primary’ risks manage the group debt and liquidity, currency risk, interest rate risk and cash management. Through the group’s financial instruments, it can hedge against interest rates and the foreign exchange exposure, The treasury and audit committee is assisted by the robust risk management process within the Britain group. Through the years, the risk management process has seen growth and strengthened its operations. The process involves the identification of the sis, the analysis and mitigation of the risk are at all level of the business. It is done through functional and operational teams.
In the process of managing the risk, each highlighted risk is assigned to an owner at the management level. The owner attributed the risk has the responsibility of ensuring appropriate action are taken in order to manage the risk. Above the owners are the risk and insurance managers, they support the overall process of risk management. They also own the group-wide risk register. Review and monitoring of the risk are through the business units or the functional management teams. The risk evaluation is on a quarterly basis through the executive team. COUNTRY AND POLITICAL RISK Every business cycle contains unique national and political risks.
All the political and country risk occurs from a global perspective but all in different forms. The challenge of political risk becomes vital as the investors have to have the knowledge of the country and political risk. The information should be in translation to reasonable and appropriate trade. The civil strife affects commodities price and local equity share. Candidates vying for the post should maintain policies that maintain currency market. The countries outlook growth perspective towards inflation and the balance of payments, both shape the behavior Of assets both abroad and locally (Zoo 2015).
Political risk in the definition is thus the probability of disruption of operations of the business by the political forces. The forces may be in the home country or resulting from a change in the international relationship. The Britain’s group of business is founded on three essential principles. These are principle of honesty, responsibility, and accountability. All the personnel in the group of company adhere to this core values. Through Incorporating the personal attribute into their daily work ethics.
The aim of the business venture is that professional standards and conducts should reflect the group’s belief in a culture full of integrity and transparency. The Britain group has its operations in the European and most the United States zone. The current risk outlook may even worsen due to the escalating impact of the united States debt; the debt slows down the growth of the company. United State marks one of its best international markets. The political stability in China also has an effect on the European group. The uncertainties in the Rezone countries cause a potential county risk in the operations of the group.
The Middle East is facing unrest issues and creates a challenge to the actions of the group of company. A case study in the year 201 1 where the investors feared on the Rezone debt crisis as it hit the London blue chip index. The Britain stocks was a must watch during the period (De Garage 2011). Technologies levels in any country pose a risk to the operations. Technology levels grow with the modernization of services. Dependents on a third party for technology platform cause the adoption to a high degree of integration on he platform. Failure on a third party provision of the technology services forces the group failure.
The challenge of skill on labor by the Britain Group is maintained through the incorporation of the personal ethics of the companies attributes on ethics. The Britain group adopts the Micro Strategy Bal platform as an enterprising standard. The adoption of the new platform is with an aim to improve the performance of the enterprise by the company. Through the platform- Micro Strategy Web(TM) enables the Britain customers and business managers run report and analyses volume of information. Analysis is on product performance at the client level on an individual level.
The group may also be affected by the authority requirement to comply with the existing and diverse regulation across the countries. The risk of territorial and jurisdictions may also affect the operations of the group. The regulation by the government in the various regions of operations affect the Britain group as some laws limit their promotional and branding methods. The target group in the areas is also in the determination of the regulations by the government. The health and safety act on the products in the various markets would be maintained a Claus that the group aims to keep.
Through the support, the group can retain its target customer. Loyal customers promote the product further. A country corruption levels also affect the group’s operations as it limits its profits on production ability. Through the integrity clause by the Britain Company, it maintains a stable and a responsive environment of its region of operations. All the personnel working in the group adhere to the provision and shape their staff attitude towards the integrity clause. Protection of data is a vital attribute of any company, the Britain group maintains a well detailed ND efficient reporting on the statement on a quarterly basis.
The tax reports are properly in highlight adhering to the regulations in the business operation. CONCLUSION The Britain group of companies highlights a broad maintenance on its exchange rate risk and the country and political risk. Through effective programs on its operations both on the exchange rate risk and political risk. The company maintains one of the best risk response programs in the industry. With every risk challenge advanced to an owner- serving as a manager to the particular risk. All the owners form a greater unit known as a national management team.
The company also focus on data information as a vital variable in the organization through the adoption of the Micro Strategy. The company information data is easy to filter for both the customer and management use. The group also strategically segments its customer group into different age, the adult, the children, and the family thus effectively covering its market. Mergers and franchise by the Britain Company give it a wider market coverage; Increasing its product brands and revenue base through the years. The company also maintain an active strategy for its goal achievement thus coming a leading brand in the industry.
Its management is built on its strong foundation of strategy and objectives.