AG Barr profits drop 8% but group insists market share is growing

Irn Bru: pink bomb by The Leith Agency
Irn Bru: pink bomb by The Leith Agency

Irn Bru-maker AG Barr, which is in merger talks with its bigger rival Britvic, has reported an 8% drop in pre-tax profits to £14.9m, but insists the its three core brands, Irn Bru, Tizer and Rubicon, have maintained "strong" market positions.

AG Barr's results for the six months to 28 July reveal a £6m jump in revenue to £129.9m. However, the company stated its operating margins were impacted by the "combined effects" of raw material costs, such as sugar, and changes in consumer purchasing behaviour, despite its "strong sales growth in the period".

The company said in a statement that the changes in consumer purchasing behaviour were largely due to the poor summer weather, with people shifting their buying power away from impulse outlets towards more promotionally driven take-home channels.

However, advertising for core brand Irn-Bru achieved its "strongest-ever consumer awareness", while also reaching its highest scores for "consumer enjoyment" to date, although sales were "slightly down" for the reporting period, the company added.

AG Barr said its Rubicon brand continued to grow, boosting volume by more than 6% in the fruit drinks market that, on the whole, "largely impacted by the weather, was 5% behind the similar period in the year".

Roger White, chief executive at AG Barr, said: "Our financial performance in the face of the combination of a cautious and increasingly value-focused consumer, and the very disappointing early summer weather, clearly demonstrates the underlying strength of our brands and operating model.

 "We expect trading to remain challenging over the coming months and we have put in place cost-control measures and a robust trading programme for the balance of our financial year.  Assuming there is no further deterioration in the market, we remain confident about our prospects.

"Discussions are ongoing following the announcement on 5 September regarding the potential all share merger of AG Barr and Britvic. A further announcement will be made as and when appropriate."

The £1.4bn merger would mean AG Barr’s brands Irn Bru, Tizer and Rubicon combining with Britvic's Robinson's, Tango, J2O, Drench and Purdey's, with White as chief executive of the combined group, should the deal go ahead.

Discussion

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now

Latest

Ex-Thomas Cook marketer Mike Hoban resurfaces at Morrisons
Barbour creates real-time illustrations of consumers' stories for summer campaign
Viral review: Samsung goes for Apple’s jugular but fails to connect
View from Brazil: why we didn't believe we could lose the World Cup
Heineken unveils ‘Open Your City’ drive with Metro for ‘men of the world’
Unilever continues portfolio 'reshaping' with Slim-Fast sale
Amazon to fight US authorities over in-app purchase claims
Google set to invest $100m in Europe's tech start-ups
Metcalfe's set to release quirky debut TV ad
Samsung pities the iPhone 'wall huggers'
Smirnoff campaign aims to make Formula One less elitist
Apple wins EU battle to register store layout as trademark
Marketing directors need to step outside 'marketing box' to earn seat on the board
Hottest virals: Burger King’s emotional gay pride Whopper ad, plus Apple and Guinness
Developer creates software enabling Google Glass mind-control
Kick-ass girl beats up shopping centre staff in music video
Top 10 ads of the week: Aldi's World Cup cider ad scores with consumers
Sony relives Germany's 7-1 victory against Brazil in Subbuteo Vine
Burberry credits 9% revenue hike on strong online sales and 'more targeted marketing'
Ritz returns to UK TV screens after 30-year hiatus
Mars creates chief health and wellbeing officer role
Brands make the most of Germany's dramatic victory over Brazil
Adios Justin King! Watch our video tribute as he leaves Sainsbury's after a decade
Nike calls time on 13-year Manchester United kit deal
Three TV ad banned over misleading 'free' call claims
GNM boss David Pemsel: 'The Guardian has got its mojo back'
M&S has missed a massive opportunity to put digital strategy at its heart
Google partners with the Barbican to show coders are artists
Samaritans encourages men to talk about issues with #DownNotOut campaign
Lego's partnership with Shell 'not awesome', according to Greenpeace viral