Last checked at 1 Aug 2018 07:00
IMMEDIATE RELEASE 1 August 2018A.G. BARR p.l.c.
("A.G. BARR")
Trading Update
Revenue increased 5% in the period and Group on track to meet full year profit expectations
A.G. BARR, which produces and markets some of the UK's leading drink brands, including IRN-BRU, Rubicon, Strathmore and Funkin, today announces a trading update in respect of the 26 weeks ended 28 July 2018.
We are pleased to report continued strong sales momentum with revenue for the 26 weeks ended 28 July 2018 expected to be c.£136m, an increase of c.5% on the prior year (2017 : £129.8m*). This is especially positive given the 8.8% growth reported for the corresponding period in 2017.
The soft drinks market was up 4.5% in value terms and increased 1.4% in volume (source : IRI UK soft drinks market data from 28 January to 1 July 2018), recovering from the impact of severe weather in the first quarter and benefiting from hot early summer weather across the UK, along with the value increase associated with the implementation of the Soft Drinks Industry Levy (SDIL) in April.
Against this market backdrop our core brands have performed well. In the period we completed the implementation of our reformulation programme and have grown market share. The IRN-BRU brand in particular has continued its positive growth momentum, with regular IRN-BRU increasing its volume and value share of the total soft drinks market alongside strong growth in IRN-BRU XTRA.
We have continued to invest behind both our established brands and our innovation pipeline. In the period this has supported further significant growth in Rubicon Spring and the recent launch of Street Drinks by Rubicon. Our new partnership brands, San Benedetto and Bundaberg, have made encouraging early progress and Funkin continues to perform strongly across all channels.
Our balance sheet remains robust supported by strong cash generation and the share repurchase programme continued during the period.
Outlook
The external landscape remains volatile. In addition we have seen the implementation of the Soft Drinks Industry Levy, the market impact of which is still to be fully determined. During this period of uncertainty we will continue to invest behind our brands, innovation and people which, while having a moderate impact on margins in the current financial year, will support the delivery of our growth strategy.
Our full year profit expectations remain unchanged.
Roger White, Chief Executive Officer, commented :
"We have delivered strong top-line growth in a period of considerable marketplace volatility and change. Our growth across core brands is especially encouraging and our strong second half brand and sales development plans give us confidence that we can deliver against our profit expectations ."
For more information, please contact:
A.G. BARR 01236 852400 Instinctif Partners 020 7457 2020
Roger White, Chief Executive Justine Warren
Stuart Lorimer, Finance Director Matthew Smallwood
Next update : Interim Results - 25 September 2018
* Note : All numbers reflect the adoption of IFRS 15 "Revenue from Contracts with Customers". This has resulted in a £7.6m reclassification in net revenue in the period that would have previously been charged within overheads. There has been a £6.8m restatement to the prior year to enable an accurate comparison of performance. There will be no impact on profit before tax.