(Alliance News) - Soft drinks maker AG Barr PLC said Tuesday its profit and revenue declined in the first half of its financial year as a result of specific brand challenges and a strong comparative performance in the year before.
For the six months ended July 27, the FTSE 250 maker of IRN-BRU reported a pretax profit of GBP13.9 million, down 23% from GBP18.2 million a year before. This was on revenue that dropped by 10% to GBP122.5 million from GBP136.9 million.
AG Barr's performance was hampered by one-off benefits in the same period the prior year, including a benefit from soft drink volumes in 2018 because of favourable weather, including a hot summer in the UK.
In addition, the company noted brand challenges in the Rockstar energy drink and Rubicon juice drink ranges. AG Barr said it has taken action to address the issues, including the launch of three new Rockstar products, and improving Rubicon's recipe; however these are not expected to bear fruit until the second half of this year.
During the period, the total UK soft drinks market value was down 0.6% , while volume declined by 4.1% year-on-year, AG Barr noted.
AG Barr declared an interim dividend of 4.00 pence per share, up 2.6% from 3.90p the year before.
"Our focus remains on delivering long-term growth. We have plans in place to address our specific brand related challenges and are ensuring that the business is appropriately scaled to perform in the current market. Despite continuing economic uncertainty we expect to meet the revised profit expectations communicated in July," said Chief Executive Roger White.
In July, AG Barr warned that does not expect to be able to recover all the volume and revenue weakness experienced at the start of the year. Consequently, profit performance is forecast to decline by as much as 20% on the year before.
For the financial year ended January 2019, AG Barr reported pretax profit of GBP45.2 million on revenue of GBP279.0 million.
Also on Tuesday, AG Barr said that Senior Non-Executive Director Martin Griffiths will step down from his role with effect on March 19, after ten years on the board since 2010.
He will be replaced by Susan Barratt, who has been a non-executive director for a year since 2018.
Shares in AG Barr were up 5.3% at 617.00 pence on Tuesday.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Barr (A.G.) (BAG)