Beverage producer Cott Corp. is showing signs of a financial turnaround, based on first quarter results.
After several years of loss or flat growth, Cott reported a first-quarter profit of $20.8 million, or 28 cents per share. A year ago the company was reporting a loss of $20.9 million, or 30 cents a share.
Toronto-based Cott Corp. makes non-alcoholic beverages, bottled and flavoured water, juice, energy drinks and tea for the private-label retail market.
As a result of the stronger than anticipated showing, Cott’s shares have rebounded to near its May 2008 price of $5.12. The company also saw 4.6-per-cent growth in its beverage case volume in North America during the first quarter.
Growth in Question
Cott’s growth is in part due to the current popularity of less-expensive private label beverages, particularly soft drinks. However, say analysts, the company’s rebound may be short lived if Walmart carries through on its announcement earlier this year that Cott would no longer be its exclusive supplier.
Last year Walmart comprised approximately 35 per cent of Cott’s North American business. The retailer plans on phasing in the change over the next three years, so that Cott will retain at least two-thirds of Walmart business this year, and just one-third in 2010.
Cott Beverages Ltd. was founded in 1955, and was the first company to produce a diet soft drink. The company began producing private-label beverages for major Canadian retailers in 1984, and in 1986 became a publicly traded company.