Irn-Bru maker not dampened by soggy summer or Scotland's sorry Euro 2024 performance

Sales of “Scotland’s other national drink” fizzed over the summer despite the cool, damp weather, with the maker of Irn-Bru forecasting further gains heading into winter.

Despite the solid sales performance, Cumbernauld-headquartered AG Barr saw its bottom-line profits impacted by one-off costs related to the closure of the Barr Direct delivery operation earlier this year and the integration of Boost, the energy drink business it bought in 2022.

Recently appointed chief executive Euan Sutherland said he was “pleased to report a strong set of first-half results” as he revealed that total revenues increased by 5.2 per cent to £221.3 million for the six months to July 27. This was driven by its core soft drink business, which saw 7 per cent sales growth on the back of increased pricing and higher sales volumes from customers.

Euan Sutherland recently took the reins as chief executive of Irn-Bru maker AG Barr.

The company said this came despite a slight volume decline in the wider UK soft drinks market, which was “partly as a consequence of the disappointing early summer weather”. It highlighted a particularly strong sales performance from its Rubicon brand while Irn-Bru also grew on the back of positive trading linked to its Euro 2024 marketing campaign.

The positive soft drink trading helped offset weaker sales of its Funkin pre-mixed cocktail brand, which was hit by pressure in the hospitality sector.

The first-half results showed that profit before tax fell 10.4 per cent to £24.9m, from £27.8m a year earlier. However, adjusted pre-tax profit was up 8.5 per cent at £29.3m. An interim dividend of 3.1p per share was declared, up 17 per cent year on year.

Barr’s - as the firm is commonly called - held firm on its performance targets for the rest of the year but stressed that it remains “conscious of the current pressure on consumers”.

Sutherland, who became chief executive in May, said: “My first few months with the business has further cemented my view that AG Barr is an excellent business with exciting, tangible and deliverable growth opportunities. The business has delivered both revenue and profit growth as well as good progress on our key strategic margin rebuild programme.

“We anticipate a strong second-half performance from our four core brands - Irn-Bru, Rubicon, Boost and Funkin - in particular, with current trading momentum underpinned by further marketing and innovation activities.”

John Moore, senior investment manager at wealth firm RBC Brewin Dolphin, said Barr’s had delivered “another solid update”, despite the effects of disappointing summer weather.

“The only fly in the ointment is the performance of its Funkin pre-mixed cocktail brand - but that has more to do with market challenges than the product specifically,” he added. “As ever with AG Barr, it’s a question of what the company will do with its financial strength. There have been several bolt-on acquisitions in recent years, and you wouldn’t rule out further additions in the not-too-distant future.”

Julie Palmer, a partner at Begbies Traynor, noted: “The maker of Scotland’s favourite soda is clearly willing to adapt to changing consumer trends which should stand it in good stead as it contends with an uncertain consumer confidence and ongoing cost pressures.”