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(Alliance News) - Irn-Bru maker AG Barr PLC on Wednesday said its annual earnings fell and said it will not pay a final dividend in order to save cash amid the Covid-19 outbreak.
Revenue in the year ended January 25 slumped 8.4% to GBP255.7 million from GBP279.0 million. Pretax profit was down 16% at GBP37.4 million from GBP44.3 million.
The company said: "Overall the year to January 2020 was disappointing with our core soft drinks business underperforming both the market and our own expectations. However, we responded proactively to the various challenges we faced, took decisive actions across the second half of the year and maintained our strategic focus.
"As a result, we ended the financial year with an encouraging trading performance which continued into the new year."
After an interim payout of 4.00 pence per share, the soft drinks maker said no to a final payout. It means its total dividend for the year is down 76% from 16.64p.
"Our usual practice at this time of the year is to propose a final ordinary dividend to be paid in June, subject to approval by shareholders at the annual general meeting held in May. However, given the unprecedented circumstances arising from Covid-19, we believe it is currently important to conserve cash and maintain balance sheet flexibility," AG Barr explained.
AG Barr said its annual performance in the soft drinks unit faced "tough comparatives", due to what it labelled "record breaking" summer weather in 2018.
" Looking back, we did not fully recognise the extent to which we benefited from the hot summer of 2018," AG Barr said.
Focus undoubtedly turns to the Covid-19 outbreak, which the company said is creating "unprecedented" uncertainty.
AG Barr added: "We have drawn down our GBP60 million revolving credit facilities in full. In addition, we have now frozen all new capital projects, as well as scaling back immediate marketing and commercial activity where sensible across the group. In accordance with the government's job retention scheme, we have commenced the "furlough" process for a limited number of colleagues at this stage."
It added that its board and senior executives have taken a voluntary 20% salary cut for a minimum of three months.
Shares in the company were down 2.6% at 496.00p each in London on Wednesday morning.
By Eric Cunha; ericcunha@alliancenews.com
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