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A-Brands

A.G. Barr Warns Of Second-Half Margins Hit Due To Inflation

By Steve Wynne-Jones
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A.G. Barr Warns Of Second-Half Margins Hit Due To Inflation

Irn-Bru maker A.G. Barr has flagged a hit to its second-half margins, citing reduced consumer confidence and increase in costs, after reporting a rise in first-half profit.

The drinks maker is now navigating a rise in input costs and lower consumer spending amid a rising inflationary environment in the UK, which it expects to continue through the year.

'Mitigate The Cost Pressures'

"We continue to take action to mitigate the cost pressures we face both in the short term across the balance of the current financial year and where possible into 2023," commented Roger White, chief executive.

"We anticipate in the coming months that the current economic environment will impact consumer purchasing behaviour, however we currently remain confident that our strategy and actions will allow us to deliver a full-year profit performance ahead of the prior year."

A.G. Barr, however, added it continues to see full-year profit ahead of the prior year helped by cost control measures and growth in sales.

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The company, which increased its interim dividend by 25%, reported an adjusted profit before tax of £25.3 million for the 26 weeks ended July 31, compared with £20.6 million a year ago.

Barr Soft Drinks

Its Barr Soft Drinks arm reported a 12.3% increase in revenue in the period, while its Funkin business reported sales up 21.4%. Overall group revenue was up 16.7%.

The group said that its operating margin, while impacted by cost inflation, has been supported by sales growth, cost control and the business' pricing approach.

"We made a very strong start to the year and continue to see good momentum across our business and brands," White commented.

News by Reuters, additional reporting by ESM – your source for the latest A-brands news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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