25th Sep 2018 09:16
LONDON (Alliance News) - IRN-BRU maker AG Barr PLC said on Tuesday that revenue grew in the first half of its financial year, despite volatile market conditions.
For the six months ended July 28, the FTSE 250 soft drinks company reported pretax profit of GBP18.4 million, down 6.2% from GBP19.4 million a year before, as the recent period lacked the previous year's one-off gain of GBP1.9 million, stemming from a property disposal. Excluding the year-ago gain, profit was up 4.0% from GBP17.5 million.
Revenue for the six-month period grew by 5.5% to GBP136.9 million from GBP129.8 million the prior year. AG Barr said this was due to a strong performance in its core brands, driven by investment, particularly in IRN-BRU and Rubicon.
This was in spite of volatile market conditions. The implementation in the UK of the Soft Drinks Industry Levy in April led to the total soft drinks market growing in value in the first half by 7.7%, including the levy, but volume increased by only 3.8%. The levy is aimed at reducing sugar consumption in the UK for health reasons.
There also were weather extremes in the UK, with snowfall in the first quarter of 2018 from the "Beast from the East" storm, followed by a record breaking hot summer, and also the shortage of carbon dioxide supplies.
AG Barr declared an interim dividend of 3.90 pence per share, up 5% from 3.71p the year before.
"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 macro-economic environment. Our core brands have performed well and have good momentum with both consumers and trade customers," said Chief Executive Roger White.
"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," White added.
Shares in AG Barr were down 1.0% at 723.00 pence on Tuesday.
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