Irn-Bru maker AG Barr promises extra fizz with 'exciting consumer engagement' after sales rebound
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In a trading update to coincide with its annual general meeting (AGM), the group noted that sales at its core soft drinks business had been “relatively strong” since the start of the new financial year. That was despite lockdown restrictions being in place across much of the first quarter.
“As lockdown restrictions have eased we have seen a positive impact on both our sales volume and mix, with a shift back towards ‘drink now’, hospitality and leisure,” it told investors.
The trading momentum has been supported by “encouraging” new product launches – Rubicon Raw Energy in particular achieving “promising” initial customer listings and consumer feedback.
The Cumbernauld-headquartered firm, which is also behind the Strathmore and Funkin brands, added: “While the pace and extent of the reopening of the hospitality sector varies by region, our Funkin business is already beginning to see the benefits, delivering on-trade sales that provide optimism for the sector’s recovery.
“Across the take-home channel, the strong performance of our Funkin ready-to-drink cocktails during 2020 is continuing, with an increase in both customer listings and new consumers enjoying Funkin cocktails at home.
“Current trading is encouraging and we have clear plans to further invest in our brands, with exciting consumer engagement and marketing activity planned across the year.”
Analysts at house broker Shore Capital noted: “As ever, Barr retains a very strong financial backbone, one that served its shareholders well through the decades and most particularly the pandemic.
“Barr also reports that its soft drinks have performed well in [the financial] year-to-date whilst it is encouraging to see warm words around recent innovation, notably the comments on the Rubicon Raw Energy.”
Barr pointed to its strong balance sheet and said it remained committed to its plan to recommence dividend payments during the current financial year. A further update in this regard will be provided at the time of its half-year trading update in early August.
The AGM update comes after results at the end of March showed that annual profits had fallen by nearly a third amid the pandemic.
The group reported a 30.5 per cent slide in statutory pre-tax profits to £26 million for the year to January 24 as sales fell 11.2 per cent to £227m. The revenue figure had been confirmed in a trading update in January.
Sales across the pubs and hospitality sector plummeted due to repeated lockdowns and trading restrictions during the pandemic and the group was unable to offset this despite surging trade at supermarkets and convenience stores.
The firm said restrictions since December, alongside the end of its contract to sell and distribute Rockstar energy drinks in October, left second-half sales down 14.6 per cent.
AG Barr kept dividends on hold, having paused them last April, but said it remained “committed” to restarting payouts to shareholders in the current 2021-22 financial year.
Chief executive Roger White said at the time: “We delivered a resilient financial performance in a year that was difficult for all.”