Last checked at 2 Aug 2016 07:00
IMMEDIATE RELEASE 2 August 2016
A.G. BARR p.l.c.
Trading Update
A.G. BARR p.l.c. ("A.G. BARR"), which produces and markets some of the UK's leading brands, including IRN-BRU, Rubicon, Strathmore and Funkin, announces a trading update in respect of the six months to 30 July 2016.
In the six month period the UK soft drinks market performance has been challenging with continued deflation and volume declines. Latest available data from IRI, covering the period 31 January to 19 June 2016, shows value down 0.8% whilst volume declined by 0.4%, and indications are that the poor weather across the full month of June and into July will further adversely impact the total market performance. Consequently trading has been highly competitive but, despite this difficult market backdrop, we have maintained both value and volume overall market share. We anticipate revenue in the period of £125m, down 2.9% year on year on a like for like* basis.
Consumer preferences have continued to develop and we have successfully advanced our response to these long term trends. In the period we have announced a new IRN-BRU zero sugar variant and launched three major new lower sugar products. Our new products are all showing encouraging early signs with both customers and consumers, and are positive additions to our broadening portfolio.
Despite the challenging market conditions we have remained focused on delivering against our strategy, launching relevant new products, closely controlling costs, managing risk and ensuring we generate strong free cash flow. Our recent Business Process Redesign investment is already producing customer service benefits and we have continued to invest for the long term in our assets and infrastructure.
Highlights in the period
● A full IRN-BRU brand redesign
● Continued reduced sugar innovation and reformulation across our portfolio:
○ The announcement of IRN-BRU XTRA, a new zero sugar variant
○ Two lower/no sugar launches across our Rubicon brand - Rubicon Light & Fruity and Rubicon Spring
○ Three Snapple Iced Tea flavours reformulated to no added sugar variants
● Strong performance from both Funkin and our International business
● New £5m glass bottling line at Cumbernauld now operational, allowing in-house production of Snapple and offering future new product development potential
● Closure of the Defined Benefit Pension Scheme to future accrual
Outlook
The decision of the United Kingdom to leave the European Union has resulted in a degree of economic uncertainty and a weakening of Sterling. The impact of weaker Sterling will not have a significant impact in 2016, but it is anticipated input costs will increase in 2017, providing management time to adjust plans accordingly.
The balance of the summer will remain an important trading period, however assuming market conditions improve and our robust second half plans deliver, we expect to meet our profit expectations for the full year.
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 - 27 September 2016
*Note: Like for like comparison excludes the sales revenue derived from the discontinued Orangina franchise in the corresponding period in 2015/16.