AG Barr posts double-digit rise in sales and profits
The firm, which recently expanded its soft drinks empire with the acquisition of exotic juice firm Rubicon, posted an 18.8% rise in pre-tax profit to £16m, on sales up 13.9% to £119.2m in the six months to July 31.
Chief executive Roger White said: “We have achieved sales growth well in advance of the market for our core brands [Irn-Bru, Rubicon and Barr] and during the period have further increased our marketing investment.”
Input cost rises were partially offset in the first half by long-term purchasing contracts and hedging, said White, but inflationary pressure was “expected to remain a feature of the second half”.
Greater marketing support and increased listings in England and Wales had helped boost sales of flagship brand Irn-Bru by 8%, while the Rubicon brand had also performed well, with like-for-like sales up 37% in the period, partly boosted by sponsorship deals with cricketing events.
However, this accelerated rate of growth was unlikely to be maintained in the second half “as we begin to meet very tough comparative figures from the prior year”, said White.
“We anticipate some additional commercial challenges for the second half as exotic fruit pulp prices have risen sharply over recent months.”
Mansfield plant to close in Q1, 2011
AG Barr, which is closing its Mansfield factory next year and increasing production at its Cumbernauld site, said the switch to third-party warehousing operated by Eddie Stobart was ahead of schedule, and would enable “the full consolidation of customer deliveries in the south of the country and the planned closure of our Mansfield site, which remains on course for the first quarter of 2011.”
Under the deal with Stobart, selected stock has also started moving from Barr’s Cumbernauld factory to the Grangemouth rail freight terminal, from which it is transported by rail to Stobart’s new central stockholding distribution centre in Crick, Northamptonshire.
The rail freight deal is one of several initiatives explored by AG Barr over the last 18 months to reduce its carbon footprint, said the company. It is also assessing the viability of generating its own electricity at Cumbernauld via a 2MW wind turbine and road-testing an electric truck at its Walthamstow depot in London.
Broker Investec Securities is forecasting about 6% sales growth in the second half or 10% for the full year.
