The Courier & Advertiser (Fife Edition)
Soft drinks firm’s progress in tumultuous year
Irn-Bru maker and Strathmore Water owner AG Barr’s half year sales have fizzed despite a tumultuous time for soft drinks firms faced with the new sugar tax, a CO2 shortage and extreme weather.
The group reported a 4% rise in underlying pre-tax profits to £18.2 million for the six months to July 28 after sales lifted 5.5% to £129.8m.
AG Barr said its “growth momentum has not been interrupted” in the six months to July 28 despite headwinds hitting the sector and a “challenging and volatile marketplace”.
The firm was forced to revamp its IrnBru drink and other ranges to reduce the sugar content ahead of the launch of the new UK soft drinks sugar tax in April.
But the group also had to contend with a market-wide shortage of CO2 at the height of the summer heatwave, when demand for fizzy drinks surged.
Roger White, chief executive of the Cumbernauld-based company, said: “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.”
Strathmore water is bottled at source in the vale of Strathmore and its associated logistics hub is a fixture of the local business scene in Forfar.
Barr’s said it had continued to invest significantly in Strathmore and its other core brands of Irn-Bru and Rubicon during the period.
It also said its marketing programme behind the brands continued apace, with the “successful delivery” of Strathmore’s partnership with the multi-sport European Championships in the summer a particular highlight.
Hargreaves Lansdown analyst Nicholas Hyett said Barr’s had faced down the challenges of a tumultuous year for the soft drinks sector.
He said: “Against that background AG Barr’s volume growth has outpaced the sector as investment behind the Irn-Bru, Rubicon and Strathmore brands delivers results.”