AG Barr lifted by ‘market factors’ in first half
AG Barr says it will resume dividend payments
Irn-Bru maker AG Barr said factors driving a strong first six months are unlikely to be repeated in the second half of the year.
In a trading update the company said group revenue for the 27-week first half is expected to be 18% ahead of last year, or 13% on a like-for-like 26-week basis.
“Trading has been strong across both our business units, Barr Soft Drinks and Funkin,” it said. “This performance has been driven by a combination of brand-led initiatives and market factors, some long-term and structural and others more one-off, resulting in a short-term boost to operating margin, which we would not expect to be replicated in H2.
“Full year operating margin is still anticipated to be slightly ahead of the prior full year.”
Funkin capitalised on the increase in demand for cocktails at home, through both traditional retail and direct to consumer channels, becoming the UK’s top-selling ready to drink cocktail brand.
The company said there have seen increased challenges associated in part with the COVID-19 pandemic, across the UK road haulage fleet, impacting customer deliveries and inbound materials.
Profit for the current 53-week financial year ending 30 January 2022, is expected to be slightly ahead of the performance delivered in the 52-week year prior to COVID-19 (2019/20 profit before tax : £37.4m).
“Our full year performance expectations take into account the one-off nature of some of the H1 benefits and our anticipation of increased cost inflation later in the year, reflecting the well documented pressure on supply chains and rising commodity prices.”
The company remains committed to recommencing dividend payments during the current financial year.
Roger White, chief executive, said: “We are pleased with the performance of the business in the year so far. There is good momentum behind our core brands.
“We plan to increase our brand investment in the second half of the year, building on our progress to date. While uncertainty remains, we are confident in delivering our plans across the balance of the year and meeting our recently revised full year profit expectations.”