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Volumes down at AG Barr

Wet weather hinders sales of Irn-Bru

Irn-Bru XtraIrn-Bru maker AG Barr said sales have fallen over the last six months and are likely to fall further because of the unseasonal wet weather.

The company, which also makes Rubicon, Strathmore and Funkin, said the UK soft drinks market has been “challenging”.

Volumes at the Cumbernauld-based company 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, it said in a trading update.

“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.”

During the period has also announced an Irn-Bru zero sugar variant and launched three 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,” it says.

“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.” 

A new £5m glass bottling line at Cumbernauld is now operational, allowing in-house production of Snapple and offering future new product development potential

The Defined Benefit Pension Scheme to future accrual has been closed.

Outlook

The company said 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,” it said.

“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.”

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