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Drinks firm suffers from wet summer

Poor weather and internal operating problems hit Irn-Bru profits

Irn-Bru CommonwealthPoor weather, falling prices and problems over an internal restructuring led to a slump in half-year profits at Irn-Bru manufacturer AG Barr.

The company said that aside from the wet summer it had faced “extremely demanding” six months which included closure of the Tredegar factory and investment at the Milton Keynes facility where it is increasing capacity.

There had been a “period of difficult internal operating conditions” over the introduction of a new business process system.

“We have now stabilised our systems and our focus is to realise the business benefits our new improved operating platform offers,” said chief executive Roger White.

“The soft drinks market in the period has been impacted by continued price deflation and very poor weather, especially in the north of the UK,” he said.

“As expected, our relative revenue performance has also been affected by the stretching prior year comparatives driven by better than average weather, strong execution behind the Glasgow 2014 Commonwealth Games and specific brand promotional phasing changes in the current year.”

Pre-tax profits for the period fell 11% from £19.03m to £16.87m on decline in revenue from £135.7m to £130.2m.

The total soft drinks market, as measured by Nielsen, experienced a 0.6% decline in revenue during the period, with modest growth of 1.4% in volume driven by strong performance in water and the continued positive performance of the energy drinks category.

Last month Barr announced a £5m investment at its Cumbernauld factory with the installation of new, high-speed glass filling capability.  This will mean the end to the long tradition of returnable glass bottles system at the end of this year.

It said the investment will also help in the development of a number of brands next year.

The board has shown its confidence in the year ahead by declaring an 8% increase in the interim dividend of 3.36p per share, payable on 16 October  to shareholders on the register on 2 October. 

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