Coronavirus: Irn-Bru maker AG Barr pledges to do all it can to keep goods flowing

Irn-Bru maker AG Barr said it was taking action to ensure that its factories were staffed sufficiently during the current coronavirus crisis but warned that it was scaling back marketing and commercial activity.

In its update, Irn-Bru maker AG Barr said it had ended the financial year with an 'encouraging' trading performance but warned of the coronavirus impact. Picture: John Devlin

The group was due to release its latest annual results this week but said it had put that on ice at the behest of the Financial Conduct Authority (FCA).

The watchdog has urged all listed companies to observe a moratorium on the publication of preliminary financial statements for at least two weeks.

In its update, Barr said it had ended the financial year with an “encouraging” trading performance, which continued into the new year. However, the circumstances resulting from Covid-19 were now creating “an unprecedented level of uncertainty for the UK and beyond”, it added.

The firm, which is also behind the Rubicon, Strathmore and Funkin brands, said that its business model allowed it to respond with “agility and pace”. Its two main production sites, in Cumbernauld and Milton Keynes, provides the group with manufacturing capability and flexibility.

Barr told investors: “We have taken steps to ensure that our raw material availability and stockholding is as robust as possible and, as yet, have experienced no difficulties.

“However, in common with most food and drink manufacturers, we are reliant on a number of raw materials and packaging types which it is not possible to store on site for more than a few days. This risk is mitigated as far as possible by good levels of finished goods stocks and to date we have maintained strong levels of service into our customer base.

“We are taking action to ensure our factories are staffed sufficiently and that our production plans optimise the capacity available at each of our sites.”

The firm said it had “multiple routes to market” serviced by a combination of distribution partners and its own fleet of around 80 vehicles.

“It is our aim to maintain supply into all customers for as long as there is demand in the market and as long as government guidance permits,” it added.

The group highlighted its strong balance sheet, but said it had also been prudent to draw down its full £60 million revolving credit facilities as the outbreak evolved.

In addition, the group has now frozen all new capital projects and is reviewing all existing projects, as well as scaling back immediate marketing and commercial activity “where sensible”.

Analysts at house brokerage Shore Capital noted: “It is no surprise that the group has cautioned [over the Covid-19 outbreak].

“Given the current lack of visibility which management cite as ‘unprecedented’, we believe it is prudent to withdraw our full-year 2021 forecasts ahead of publication of the full-year 2020 results when hopefully visibility will have improved.