AG Barr, the soft drinks company, said it has continued to grow ahead of the market and anticipates sales revenue of c£130m, up over 4.5% on the prior year, despite the “significant impact of unprecedented weather on the market in the early summer”.
The Irn Bru producer said it expected the recent extremely poor weather, with record levels of rainfall, to have had a further negative impact on market performance.
It said that despite these difficult operating conditions, it had maintained its strategy of investing in brand equity and extending distribution. The company said that its core brands continue to respond well to this “consistent long-term approach”.
The group said that margins in the period had been impacted by increases to cost of goods, increased brand investment and adverse changes to its sales mix at brand, pack and channel level and as a result it expects profits in the first six months to be slightly below the prior year.
It said: “We anticipate that margins will improve in the second half but that it is unlikely to offset the margin shortfalls of the first half.”
The group said that its operational focus has been to deliver a strong level of customer service across its business at the same time as developing the detailed execution plans for its investment in the Crossley site, at Milton Keynes.
It said it had now completed all of the development actions for Crossley and having obtained detailed planning approval it has now committed to the full project, including a new credit facility through HSBC to support the development.
The group anticipates a project budget of c£41m and a production commencement date for the site in the third quarter of 2013.
Over the period its balance sheet remained strong and its capital investment plans were in line with its expectations.
The company said: “Despite the significant impact of unprecedented weather on the market in the early summer, we have delivered solid growth as our brands have responded extremely positively to continued development and investment. Assuming there will be no further deterioration in the market place we anticipate further growth and margin improvements in the second half. We plan to maintain our long term agenda of investing in brands and developing the infrastructure and organisation capable of delivering future growth.”
