(Sharecast News) - Shares of AG Barr fizzed lower after the Irn-Bru maker said late on Tuesday that its sale and distribution contract with US energy drinks company Rockstar Inc had been terminated and that trading continues to be dented by the Covid-19 lockdown.
Barr said it will continue to manufacture, sell and distribute Rockstar energy drinks, which contributed approximately 8% of its sales volumes in the prior financial year, until 1 November. The company said it will receive a one-off compensation payment.
It also provided a brief update on trading, which it said continues to be hit by the lockdown measures introduced in March.
"At the current time it remains difficult to predict how the balance of the financial year will evolve, with the easing of lockdown restrictions and resulting impact on consumer purchasing patterns," it said.
AG Barr is due to release a trading update on 28 July.
At 0840 BST, the shares were down 4.1% at 461.50p.
House broker Shore Capital said news of the contract termination is "disappointing".
"Barr is a class act, one of the finest beverage companies in these Isles, and so we see it as a shame that the Rockstar label is no longer part of its product portfolio; we await to see the final financial settlement in due course."
Barr (A.G.) (BAG)2 May 2024 13:49