The manufacturer revealed plans for 90 job losses alongside a 2.8% fall in revenue, as it reported revenue of £125.6M in its six months results to July 30 2016.
The company, which owns soft drinks brands Irn-Bru, Rubicon and Strathmore, said the jobs were likely to be cut in its commercial, supply chain and central functions. The restructuring, which has been ongoing for the past two and a half years, is expected to be completed by the end of its financial year on January 30 2017.
The business said it delivered a “solid performance” in its half-year results, despite the decrease in revenue year-on-year. Profit before tax was reported at £21.1M – up 20% compared with the same period last year.
‘Solid first half performance’
AG Barr chief executive Roger Whitesaid: “We have delivered a solid first half performance, maintaining market share, improving our operating margin with a slight improvement in our pre-exceptional profit versus the prior year.”
“Following our significant investment in assets, infrastructure and systems, delivered through our Fit for the Future business improvement programme, we are announcing the programme's final phase, a business reorganisation which will create a faster, more efficient and leaner organisational structure.”
The company also said it’s on track to either reduce or completely remove sugar from two-thirds of its product portfolio by 2018.
AG Barr said that if the sterling continues to remain weakened its input costs would increase across a number of its key commodities. It said: “We currently forecast this to have a year-on-year impact of around £3M to £4M in 2017. However we are taking action to offset this cost where possible.”
Outlook ‘remains uninspiring’
Meanwhile, city analyst N+1 Singer said that while AG Barr’s interim results were in line with predictions, its outlook “remains uninspiring”.
“Trading appears to have been better over the last six weeks [for AG Barr], which is hardly a surprise given the hot weather, but the full year outlook is signalled as likely to show modest year-on-year growth – assuming a good Christmas,” the analyst said.
“The update also signals a 3–5% input costs headwind next year, but the company has plans to further get its house in order and has signalled around £4M of costs savings (primarily via staff redundancies).”
AG Barr trading update – at a glance
- £125.6M in revenue – down 2.8% like-for-like
- Profit before tax was £21.1M – up 20% like-for-like
- 90 job losses as part of restructuring