Profits were marginally up at £16.2M compared with £16M during the same period last year.
Phil Carroll, analyst with Shore Capital, told FoodManufacture.co.uk: “Against a tough market where you’ve had the consumer impact and pretty poor weather during and into the summer as well as lots of intensity in the soft drinks market – particularly Coca-Cola and Pepsi – [AG Barr] still produced a good set of numbers.
‘Flat performance’
“They continue to make improvements to the business albeit from an operating and profitability sort of level, it’s come out as a flat performance.”
Caribbean drinks brand KA posted the most impressive growth in the past six months, continuing a previous trend. KA grew 72% and recorded revenue four times the size of AG Barr’s Tizer brand, the company said in its report.
Although sales of leading brand, Irn Bru, dipped in the first quarter of the year, stronger second quarter sales left the brand down only 1.2% compared with the same period last year.
Sales across AG Barr’s Rubicon fruit drink range remained strong, with 8.8% revenue growth. Price increases implemented at the end of 2010 covered the rise in the price of fruit, while increased brand awareness through cricket sponsorship helped revive sales, said the company said.
It noted particularly strong growth in the north of England.
The firm was also able to reduce its debt position to £15.2M by changing its retirement benefits position, reducing the level of borrowing and ending an interest rate hedge made to cover the Rubicon acquisition, the report said.
To offset rising commodity costs, the firm had also forward purchased certain commodities to secure improved pricing arrangements.
At the firm’s Cumbernauld plant, the late delivery of equipment, a palletiser and a flash pasteuriser, had reduced efficiency and increased costs but the company believes the worst is now over.
High fuel prices
The interim report also set out plans for investment in increased production capacity in southern England during 2012–2013. Shore Capital described this as an important step in the business’s development probably brought about by increasing distribution costs due to high fuel prices.
Roger White, the firm’s chief executive, said: “We are pleased to have delivered financial performance in line with our expectations. This is a particularly positive result given the challenging comparatives we faced in the first half of the year, the relatively poor summer weather, which has impacted the soft drinks market and a competitive market backdrop.”
White remained confident of achieving the firm’s full year target. “The combination of less demanding comparatives, better cost visibility, a strong programme of brand activity and good sales momentum gives us confidence that, assuming no significant adverse changes in the marketplace, we will meet our expectations for the full year,” he said.