The Courier & Advertiser (Perth and Perthshire Edition)
Irn-Bru maker on track after curbing costs
Irn-Bru maker AG Barr said cost controls and a bump in second-half trading have put it on track to meet fullyear profit guidance.
The Cumbernauld-based company, which also produces Strathmore mineral water at Forfar, gave the upbeat update while warning of challenges ahead.
It said that in the six months to the end of July the UK soft drinks market performance had been challenging.
It will meet profit expectations despite a slight dip in revenue to £257 million for the 52 weeks to January 28, compared with £258.6m a year earlier.
New product launches like Irn-Bru Xtra and Rubicon Spring helped boost trading in the second half of the year.
AG Barr, which also produces Snapple, said it managed to maintain “tight control” of costs, while a company-wide overhaul helped cut overheads in the fourth quarter.
It is investing £10m in its production and distribution centre in Milton Keynes.
In September it announced it was cutting 90 jobs and was grappling with a shift in consumer tastes towards lowsugar drinks after the government announced plans for a sugar tax in 2018.
The job cuts, which accounted for around 10% of the workforce, was part of a company-wide revamp expected to cost around £4m.
AG Barr, which has a new £5m glass bottling line at Cumbernauld, said it does not expect market conditions to improve this year.
“The uncertain economic environment indicates that 2017 will be another challenging year for UK-based businesses,” the company stated.
“However our strong and flexible business model, our differentiated brands and our well-invested asset base ensure we are well placed to continue to deliver long-term value to shareholders.”
AG Barr will publish full-year results on March 28.