The Investment Column: Take a sip at Britvic when the shares start trading

Steer clear of Uniq until the rise in debt is checked; Buy Chrysalis on the hope of a deal

Something quite juicy is about to be offered to investors. It is the drinks company Britvic, which is not just about those little bottles of orange to go with your vodka, but is also the distributor for Pepsi in the UK and owner of the growing J2O and Fruit Shoot brands.

The company announced its long-awaited flotation plans yesterday, and will now start touring the City to gauge interest. Private punters will not be given the chance to get in at this stage, but should take a serious look at the company when shares start trading early next month.

One of Britvic's key attractions is its proven ability to innovate. This is evidenced by the 20 per cent per year growth of J2O, which it invented in 1998, and of Fruit Shoot, the number one kids' drink after just five years. New water and flavoured water brands planned for next year have very strong potential in an increasingly health-conscious market.

Britvic also has a 14-year licence to sell Pepsi ranges, including Tango and Gatorade, in the UK, which accounts for 40 per cent of its turnover. New flavours and "no added sugar" product launches by both Pepsi and Coca-Cola have been boosting the market for fizzy drinks in recent years.

Plans for £12m cost savings over the first three years of Britvic's life as a floated company should also go down well. And longer term, there is the hope of an international push for brands such as Robinsons, J2O and Fruit Shoot.

There has been only limited financial information given so far, but Britvic has enjoyed five years of 5 per cent turnover growth and about 7 per cent earnings growth, and current trends are likely to persist.

The total value being put on the company is about £800m, but that will include about £300m of debt, the interest on which will have to be subtracted from the earnings before interest, tax and exceptionals number that was publicised yesterday. That was £78.7m for the financial year just finished, implying post-everything earnings in the new year of £40m-£45m. The equity, then, of £500m, or perhaps £550m would be valued on a price-earnings multiple of between 11 and 14. Unless it breaks the top of that range, the shares will look an attractive investment for the long term.

Steer clear of Uniq until the rise in debt is checked

It takes a particular type of chief executive to make the stark admission that his company has "lost focus on its customers' needs". It takes a new chief executive.

Geoff Eaton - who arrived at Uniq, the supermarket own-brand food producer, in August - was sparing none of his predecessor's blushes at the company's interim results yesterday. The core UK division performance was "unacceptable", even worse than the City feared. The supermarkets are demanding ever-lower prices but, embarrassingly, when Uniq has been able to win profitable new business, its factories have been ill-equipped to cope. In one case, it developed a mountain of unwanted jelly, mousse and and trifle because of an IT slip-up.

Losses in the UK spiralled to £9.6m from £1.2m last time, and the group as a whole managed only to break even at an operating profit level. The dividend was held at last year's level, but it is still touch and go whether that will be the case at the full year. Mr Eaton's frank statement of Uniq's internal malaise suggests costly restructuring will be necessary.

Supermarket own-brand food producers, currently squeezed between the mighty supermarkets and relentlessly rising energy costs, are not this column's favourite snack. Uniq shares were 173.5p when we advised readers to steer clear at the start of the year. Now 118.5p, we would still like to see an end to the rise in debt before changing that view.

Buy Chrysalis on the hope of a deal

Chrysalis, the radio and record label business, confirmed everybody's worst fears yesterday with annual results for the 12 months to the end of August showing sales down and profits plunging into the red.

Advertising across its commercial radio stations has been poor - in line with the sector as a whole - and its recently sold book publishing operation proved a particular problem. Chrysalis's record business also tripped up with its Echo Label, home to Moloko and Feeder, the culprit here.

Having already got out of television production, and now books, Chrysalis bosses have fewer things to distract them. The company is now making a virtue of being "focused" on radio and music, although owning both radio stations and record labels has no compelling logic. Investors can only keep their fingers crossed for an improvement in advertising revenues in commercial radio, but at least Chrysalis does own a market leader in Heart, its London FM station currently outperforming GCap Media's Capital FM.

The most revealing item in the company's results came from the founder and chairman Chris Wright, who accepted that the company operated in "dynamic, competitive" markets that would see "significant change and consolidation over the coming years". Against this background Mr Wright, who owns 26 per cent, promised to deliver maximum value for shareholders. In other words, if the right deal comes along, the company will sell. This should be music to the ears of Schroders, which also owns 26 per cent. Buy on the hope of a deal.