Soft drinks firm A.G. Barr has issued a trading update in which it said that it expects half year revenue to be 5% up on the previous year, at £136 million.
This is on top of the 8.8% growth the company reported in the corresponding period last year, and is 'especially positive' given the current market conditions, it said.
Severe weather in the first quarter, coupled with the introduction of the Soft Drinks Industry Levy (SDIL) in April impacted the company, however recent hot summer weather has provided a panacea.
'Volatile' Landscape
'The external landscape remains volatile,' the company said in a statement. 'We have seen the implementation of the Soft Drinks Industry Levy, the market impact of which is still to be fully determined.
'During this period of uncertainty we will continue to invest behind our brands, innovation and people which, while having a moderate impact on margins in the current financial year, will support the delivery of our growth strategy.'
The group said that it has completed the implementation of a reformulation programme that has enabled it to grow market share, with its core Irn-Bru product seeing volume increases.
In addition, the launch of Street Drinks by Rubicon and the continued positive performance its Rubicon Spring brand have also been growth drivers.
"We have delivered strong top-line growth in a period of considerable marketplace volatility and change," said Roger White, chief executive officer.
"Our growth across core brands is especially encouraging and our strong second half brand and sales development plans give us confidence that we can deliver against our profit expectations ."
Analyst View
Commenting on the group's performance, Phil Carroll of Shore Capital stockbrokers said, "Positively, growth has been driven by strong performances across the group’s core brands and management state that it is on track to deliver against its full year profit expectations.
"Therefore, we leave our FY2019F expectations unchanged at this stage and we remain confident Barr can deliver another year of progress."
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
