The Courier & Advertiser (Perth and Perthshire Edition)
Sales fizz for Irn-Bru owner AG Barr
Irn-Bru and Strathmore Water owner AG Barr saw profits move lower in the first half despite an extra fizz to sales.
At £136.6 million, total revenues in the first half were £11m higher than in the comparable period last year.
Pre-tax profits for the six months to July 29 came in at £19.4m, including an exceptional credit of £1.9m.
The previous year saw the firm post pre-tax profits for the period of £21.1m, bolstered by one-off credits of £4.1m.
With exceptionals stripped out, the current year performance was £500,000 ahead of 2016.
The firm said it remained on track to achieve its financial goals for the year.
The company’s shares closed the day down 0.08% or 0.50p at 614p after the update.
“The strong sales momentum of the second half of last year has continued and has combined with significant progress from our innovation to deliver strong sales growth and market share gains in the period,” chief executive Roger White said.
“While we maintain tight cost control across the business, we have increased investment in the support of our brands and innovation launches and expect to continue this across the full year.
“Our reformulation activities remain on track as we move into the final implementation stages of this initiative in what will be a busy second half.
“Although the soft drinks market has been impacted negatively in the short term by the mixed weather since late July, assuming market conditions across the balance of the year are reasonable, the company remains on course to meet the board’s expectations for the full year.”
Barr’s reformulation programme follows a move by then UK Chancellor George Osborne in his 2016 Budget to introduce a new levy on companies producing sugary drinks.
The levy is due to come into force next year and relates to drinks with total sugar content of more than five grams per 100 millilitres.
Barr’s said it invested £300,000 in the half-year period in reformulating its product range.
The company expects its programme to ensure 90% of its products fall below the levy threshold by the end of the financial year in January.
It said total costs of the programme were likely to significantly exceed the normal expenditure when introducing a new product or reformulating an older drink.
Barr’s viewed the costs as nonrecurring and booked them under exceptional expenditure.