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Sales fall in 'volatile' market

AG Barr confirms £11 million expansion of MK facility

AG Barr headlineIrn-Bru maker AG Barr has confirmed plans to invest £11 million expanding its giant Milton Keynes plant.

Daily Business revealed in March that the company wanted to boost  production and storage capacity at the Buckinghamshire facility which was completed just under two years ago.

It is highly automated, sits on 12.7 acres of land, and output this year should double to 19 million cans.

It currently has one canning line that fills 2,000 cans a minute with Irn-Bru, Diet Irn-Bru and the energy drink Rockstar. The factory employs 67 AG Barr staff and 100 who work for haulage firm Eddie Stobart which manages the adjacent warehouse.

In a statement today, the company said: “We are pleased to confirm that we have now signed development agreements to build further warehousing capacity as we continue to develop our Milton Keynes site. This includes the acquisition of an additional 1.54 acres of land.

“We have also agreed to purchase a further 3.86 acres of land, adjacent to our existing site, to give us additional expansion options in the future. The total cost of this development is £11m including £4m for the land for additional future expansion.”

Ahead of its annual general meeting in Glasgow today the company said total group sales, excluding the now divested Orangina brand and Findlays water coolers, declined by 1.1% for the 15 weeks to 9 May 2015 against the same period last year.

The recently acquired Funkin business continues to grow and contributed just under £3m to gross sales. In the period, the total soft drinks market as measured by Nielsen, recorded “modest” value growth of 0.7%.

“As previously indicated, this sales performance reflects the return to a more normal sales phasing over the year compared to the strong first half performance in prior year sales related to our Glasgow 2014 Commonwealth Games marketing and promotional activity.

“Margins continue to hold up well as we drive efficiency improvement across the business.

“We have a strong summer brand programme planned across all of our core brands and expect to see a return to sales growth in the second half of this financial year.

“The balance sheet remains strong and there have been no significant changes in the financial position of the company. “

It said the economic outlook “appears more positive” but this is tempered by a “competitive and volatile” retail market.

“We remain confident in our strategy and long-term prospects. We are on course to meet our expectations for the full year despite the challenging conditions across the market.”

 

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