Last checked at 1 Feb 2018 07:00
1 February 2018
A.G. BARR p.l.c.
("A.G. BARR")
Trading Update
A.G. BARR p.l.c., which produces and markets some of the UK's leading drinks brands, including IRN-BRU, Rubicon, Strathmore and Funkin, today announces a trading update in respect of the financial year ended 27 January 2018.
Total revenue for the 52 weeks ended 27 January 2018 is expected to be c.£277m, up c.7.5% on the prior year (2017 : £257.1m).
This positive revenue performance reflects the continued success of our innovation alongside strong trading execution across our core brands. It is pleasing that we have continued to outperform the total UK soft drinks market and increased our overall market share. Latest IRI available Marketplace data for the 48 weeks to 31 December 2017 saw the market value up 2.7% and volume broadly flat.
Since our announcement in March 2017 that over 90% of our portfolio would be moving to lower or no sugar, we have extended our innovation and reformulation programme such that we now expect that up to 99% of our portfolio will contain less than 5g of total sugars per 100ml before the implementation of the soft drinks sugar tax in April this year.
As anticipated, the sugar reduction in regular IRN-BRU in early January 2018 was met with widespread media interest. Our extensive research and testing in the preceding years gave us confidence that we had an excellent taste match and, whilst it is still early days, the consumer response to the new product has so far been encouraging.
Our balance sheet remains robust, supported by strong free cash flow, and we have continued to invest across the business while also progressing the share repurchase programme we announced in March 2017.
We have not been immune to the external cost pressures faced by many businesses throughout 2017, particularly in relation to the weakness of sterling, however we remain confident of delivering profit growth for the year in line with our expectations.
Outlook
It is expected that 2018 will be another challenging year for UK businesses against a backdrop of continued uncertain economic conditions. In addition the soft drinks industry faces significant changes in regulation, customer dynamics and consumer preferences, bringing both challenges and opportunities. We believe that our strong and flexible business model, our portfolio of brands which reflect the requirements of today's consumer, and our exciting innovation pipeline, ensure we remain well placed to capitalise on opportunities to grow our business and deliver long-term value to shareholders.
A.G. BARR intends to announce its full year financial results on 27 March 2018.
For further information, please contact:
A.G. BARR Tel: 01236 852400 Roger White, Chief Executive
Stuart Lorimer, Finance Director
Instinctif Partners Tel: 020 7457 2020 Justine Warren
Matthew Smallwood