Soft drinks blow
AG Barr profits slump in ‘disappointing’ first half
Sales took a hit in the first half
Profits at Irn-Bru maker AG Barr fell during a “disappointing” first half as the company grappled with wetter weather, discounting and changes to some of its recipes.
The company, which saw its shares plunge by a quarter in July when it warned the market of the downturn, said today it has addressed “brand related challenges” in its Rockstar energy and Rubicon juice drinks, and customers are adjusting to higher prices.
Revenue for the six months ended 27 July fell to £122.5m (2018 : £136.9m) and profit before tax and exceptional items came in lower at £13.9m (2018 : £18.2m). Statutory profit before tax was £13.5m (2018 : £18.2m) took into account £0.4m of exceptional costs associated with an internal restructuring programme which began in the period.
The company said: “We have returned our Barr Soft Drinks business, particularly Irn-Bru, to its long-term value driven approach, improving our price positioning and reducing our promotional intensity within the market.
“This transition, combined with the disappointing spring and summer weather, most notably in our key markets of Scotland and the north of England, has had a short-term volume impact across the portfolio, exacerbated by specific brand challenges in Rockstar energy and Rubicon juice drinks.
Barrs didn’t listen to their customers when they went ahead and destroyed decades of history by changing the recipe for Irn Bru. These resulting issues were predicted and I’m afraid to say they are not surprising.