FDBusiness.com

AG Barr, which produces and markets some of the UK’s leading drink brands, including IRN-BRU, Rubicon and Funkin, has reported a sharp fall in revenue and profits for the six months ended 27 July 2019. The group recorded revenue of £122.5 million – down from £136.9 million in the first half of 2018 – and profit before tax and exceptional items of £13.9 million – against £18.2 million in 2018.

Statutory profit before tax was £13.5 million – compared to £18.2 million in the corresponding period of 2018 – taking into account £0.4 million of exceptional costs associated with an internal restructuring programme which commenced in the period.

However, 2019 is expected to be a period of pricing transition for the business following an unprecedented year for the soft drinks industry in 2019 due to a combination of unusual factors including complex changes to pricing and promotional dynamics in the market following the introduction of the Soft Drinks Industry Levy (SDIL), the significant impact on demand and supply, related to CO2 shortages, and a long, hot summer.

Roger White, chief executive of AG Barr, comments: “Our focus remains on delivering long-term growth. We have plans in place to address our specific brand related challenges and are ensuring that the business is appropriately scaled to perform in the current market. Despite continuing economic uncertainty we expect to meet the revised profit expectations communicated in July.”

The revised expectations are for profit performance for the full year to decline versus the prior year by up to 20%.