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Bottler falls flat in eastern Europe

COCA-COLA BEVERAGES, the bottling operation that came to the market last summer, continued its disappointing run yesterday with a 9 per cent fall in operating profits, attributed to problems in the Ukraine and Belarus. These operations fell into losses following the devaluation of the Russian rouble last year.

The company has taken action to shed jobs and mothball plants in the two troublesome territories, leading to an exceptional charge of pounds 14.2m. This, together with pounds 15.4m of other reorganisational charges, pushed Coca- Cola Beverages into a pounds 15.5m loss for the year.

However, the chairman and chief executive, Neville Isdell, said the group should not be judged solely on its two worst-performing regions. He pointed to volumes up 6 per cent and good growth in markets such as Italy and Poland as grounds for optimism.

"We feel a bit like Lennox Lewis," said Mr Isdell. "We've lost two rounds, but no-one seems to be interested in the other 10."

Even so the bottling group, which is 50 per cent owned by Coca-Cola, has proved to be a major stock market disappointment. The float was 13 times oversubscribed last summer at an issue price of 160p as investors bought into the story of growth from emerging markets and the backing of the Coca-Cola brand.

But the Russian crisis has damaged both the business and sentiment and the shares now languish at 89p, down by 2.5p yesterday.

Prospects do not look to be exciting, but now is not the right time to sell.