AG Barr boosted by delicate drink demand regardless of poor climate
- Total revenues up 5.2% to £221.3m for the six months ended 27 July
AG Barr sales were boosted by strong soft drink demand in the first half despite ‘disappointing early summer weather’, helping to offset weakness in its cocktails unit.
Total revenues increased by 5.2 per cent to £221.3million in the six months to 27 July, thanks to 7 per cent jump in the Irn-Bru maker’s soft drinks business on the back of higher prices and volumes.
But a slump in canned cocktails sales contributed to a 10.4 per cent fall in profits to £24.9million.
The Scottish firm said the fall in profitability was mainly due to one-off costs related to the closure of the Barr Direct delivery operation and the integration of energy drink Boost.
AG Barr saw its first half sales boosted due to strong soft drink demand despite ‘disappointing early summer weather’.
The increase in cocktails sales over the period came despite a slight decline in volume across the broader UK soft drink market, which was ‘partly as a consequence of the disappointing early summer weather’, the group said.
AG Barr added that its Rubicon brand and Irn-Bru grew driven by positive trading associated with its Euro 2024 marketing campaign.
Its strong performance in soft drink trading was able to offset weaker sales of its Funkin pre-mixed cocktail brand, which faced pressure in the hospitality sector.
Funkin sales were 9.4 per cent lower as ‘late-night venues’ were especially impacted by weak consumer demand.
The company reiterated its targets for the year, while emphasising that it remains ‘conscious of the current pressure on consumers’.
Euan Sutherland, chief executive of AG Barr, said: ‘We anticipate a strong second-half performance from our four core brands – Irn-Bru, Rubicon, Boost and Funkin – in particular, with current trading momentum underpinned by further marketing and innovation activities.’
This was only Sutherland’s second trading update since becoming CEO in May.
Sutherland, a veteran in the consumer goods industry, was most recently group chief executive of the over-50s holiday and insurance group Saga and previously held the top role at fashion retailer Superdry and The Co-op Group.
Following the trading update, AG Barr shares dipped 4.38 per cent to 633p in early afternoon trading on Tuesday.
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