Profits fizz at Irn-Bru firm
Sep 28 2010 By Graeme Evans
IRN-BRU maker AG Barr reported a 19% jump in profits today as consumers in England and Wales got a taste for "Scotland’s other national drink".
The Cumbernauld-based company, which also makes St Clements, Tizer and Rubicon fruit juice, said it outperformed the market as revenues lifted 14% to £119.2 million and underlying profits hit £16 million in the six months to July 31.
It said Irn-Bru maintained its recent growth rate, with revenues up 8% in the period, after it increased levels of distribution in England and Wales and ramped up marketing at a consumer and trade level across the UK.
The strongest brand performance came from Rubicon after its profile was boosted by a deal with the England and Wales Cricket Board to sponsor the Friends Provident t20 county competition.
Rubicon sales grew 37% on a like-for-like basis in the period but Barr said this was unlikely to be maintained due to tougher year-on-year comparatives.
It also anticipates some pricing pressures in the second half as exotic fruit pulp costs have risen sharply over recent months.
Barr, which has produced Irn-Bru to a secret recipe for more than 130 years, said the excellent weather buoyed the soft drinks market in the early summer but that the company was now entering a tougher period.
However, it added: "Despite poor late summer weather, trading in the first few weeks of the second half has continued to give us confidence that we will meet our full year expectations."
Nicola Mallard, an analyst at Investec Securities, described the results as excellent and said margins continued to benefit from cost controls.