FDBusiness.com

The poor summer weather has impacted upon the financial performance of UK soft drinks manufacturer AG Barr in the first six months ended July 30th 2011. Driven by the company’s core brands of Irn-Bru, Rubicon and Barr, turnover increased by 4% to £124.0m with volume up by 1.4% but profit on ordinary activities before tax, excluding exceptional items, was flat at £16.2 m.

“This is a particularly positive result given the challenging comparatives we faced in the first half of the year, the relatively poor summer weather, which has impacted the soft drinks market and a competitive market backdrop,” says Roger White, chief executive of AG Barr. “Whilst we remain cautious regarding the second half, given the market context, we are confident that we have a strong programme of activity including further innovation, which should help maintain our growth momentum.”

Roger White, chief executive of AG Barr.

The overall soft drinks market was characterised by an increase in the level of promotional intensity during the first half, as brand owners and retailers sought to pass on price increases on the one hand but increased promotional activity to maintain market share on the other. AG Barr’s pricing strategy was designed to minimise cost increases to consumers where possible and to ensure its brands remain good value for money without having to increase the level of price promotion.

To facilitate its further UK expansion, AG Barr is planning to invest in a new manufacturing facility in the South of England with canning capacity along with the potential for additional PET capacity. It is anticipated that this new facility will come on stream over the course of 2012/13.