Barr (A.G.) Regulatory News (BAG)

IMMEDIATE RELEASE 2 August 2017

A.G. BARR p.l.c. 

("A.G. BARR")

Trading Update 

Revenue up 8% 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 29 July 2017.

We are pleased to report a strong first half sales performance supported by the continued success of last year's new product launches. Revenue for the 26 weeks ended 29 July 2017 is expected to be £136m, an increase of c.8% on the same period in the prior year (2016: £125.6m).

This strong sales performance was delivered against a market backdrop that saw value increase by 3.5% and volume by 2.1% (Source: IRI UK soft drinks market data from 29 January to 18 June 2017). 

In the first half we increased our investment in support of our innovation and brand growth activity. This, combined with slightly later than anticipated phasing of price increases and generally higher operating costs, including the effect of weaker sterling on input costs, had a moderate impact on margins during the period.

We are making good progress with our sugar reduction programme and are confident that we will meet the portfolio target communicated in March 2017. We expect this programme to be completed by the end of the financial year (January 2018) as the reformulated products are phased in across the next six months.

Outlook

While the wider economic environment continues to be uncertain, we have a clear strategy and a strong commercial plan in place, and we remain confident that we will deliver a full year financial performance in line with the Board's expectations.

Roger White, Chief Executive Officer, commented:

"We have delivered a good first half with strong sales growth supported by our successful innovation programme, particularly IRN-BRU XTRA, which has now been launched in England and Wales, and Rubicon Spring, which is gaining distribution across multiple channels. We are well positioned to deliver against our expectations across the balance of the year."

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Next update: Interim Results - 26 September 2017