Irn-Bru owner's sales take a hit from poor summer

Irn-Bru owner AG Barr today said its first-half sales have taken a knock from the poor weather over the past two months.

AG Barr said sales were hit by the poor summer weather. Picture: John Devlin

The Cumbernauld-based group, which also produces the Rubicon, Snapple and Strathmore brands, said it expects to report revenues of about £125 million for the six months to 30 July, down 2.9 per cent on the same period last year on a like-for-like basis.

In today’s trading update, Barr said: “In the six-month period the UK soft drinks market performance has been challenging with continued deflation and volume declines.

“Indications are that the poor weather across the full month of June and into July will further adversely impact the total market performance. Consequently trading has been highly competitive but, despite this difficult market backdrop, we have maintained both value and volume overall market share.”

In response to changing consumer tastes, Barr has announced a new zero-sugar variant of Irn-Bru, dubbed XTRA, along with lower-sugar varieties of Rubicon, which are said to have received an “encouraging” early response from shoppers.

“Despite the challenging market conditions, we have remained focused on delivering against our strategy, launching relevant new products, closely controlling costs, managing risk and ensuring we generate strong free cash flow,” said Barr, adding that its new £5m glass bottling line at Cumbernauld is now operational, “allowing in-house production of Snapple and offering future new product development potential”.

While the group said the Brexit vote and resulting weakness of the pound would not have a major impact this year, it expects raw material costs to increase in 2017.

It added: “The balance of the summer will remain an important trading period, however assuming market conditions improve and our robust second-half plans deliver, we expect to meet our profit expectations for the full year.”