Irn-Bru Maker Meets Half-Year Expectations Despite UK Market Volatility
A.G.Barr has delivered a solid first half financial performance despite volatile market conditions for soft drinks in the UK, according to its latest interim report.
The group, which produces some of the UK's leading drink brands, including Irn-Bru, Rubicon, Strathmore and Funkin, saw its revenues grow by 5.5%, to £136.9 million, in the six months ended 28 July 2018.
At the beginning of August, the group predicted that its half-year revenues would increase its revenue by 5% to £136 million.
Revenues were boosted by strong volume growth, up 7.2%, which it said reflected the resilience of its core brands and growing market share.
Profit before tax at the soft drinks maker increased by 4.0% to £18.2 million in the period, against £17.5 million in the same period last year.
Growth Through Volatility
"We have delivered a solid financial performance in the first half of the financial year, navigating through the Soft Drinks Industry Levy implementation, reformulation, extremes of weather and CO2 shortages in addition to a dynamic consumer, customer and macroeconomic environment. Our core brands have performed well and have good momentum with both consumers and trade customers,” said Roger White, chief executive ofA.G.Barr.
Despite the introduction of the Soft Drinks Levy (SDIL) in April, A.G.Barr said that its total soft drinks market grew in value sales by 7.7% as its volume sales only increased by 3.6%.
In addition to the SDIL, the UK market was also offset by severe weather conditions in Storm Emma in sprain and the record-breaking hot summer, which also saw a shortage in CO2 in the UK.
Despite all the external challenges, the group’s core brands have performed well, with solid momentum, and thus the group expects further investments during the second half of the year, and anticipates only a moderate impact on its margins.
“We will continue to ensure our actions and investment decisions support our long-term growth strategy. We plan to invest further across the second half of the financial year which we anticipate will have a moderate impact on margins. We remain on target to meet our profit expectations for the full year."
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Aidan O'Sullivan. Click subscribe to sign up to ESM: European Supermarket Magazine.