Barr(A.G.) PLC Pre-close trading update (6083F)
July 16 2019 - 1:00AM
UK Regulatory
TIDMBAG
RNS Number : 6083F
Barr(A.G.) PLC
16 July 2019
IMMEDIATE RELEASE 16 July 2019
A.G. BARR p.l.c.
("A.G. BARR")
Pre-close trading update
A.G. BARR, which produces and markets some of the UK's leading
drink brands, including IRN-BRU, Rubicon and Funkin, will announce
its interim financial results for the 26 weeks to 27 July 2019 on
24 September 2019.
As previously communicated, 2018 was an unprecedented year for
soft drinks with changing pricing and promotional dynamics in the
market following the introduction of the Soft Drinks Industry Levy
(SDIL) alongside CO(2) shortages and a long, hot summer. Against
this backdrop we placed an intentional short-term trading focus on
volume which successfully boosted growth and, as updated in March,
we have subsequently returned our Barr Soft Drinks business to its
long-term value driven approach, increasing price positioning in
the market.
While we anticipated that volume would be impacted by this
return to our traditional pricing strategy, trading in the
financial year to date has been below our expectations. This has
been exacerbated by some specific brand challenges, particularly in
Rockstar energy and Rubicon juice drinks, as well as disappointing
spring and early summer weather, most notably in Scotland and the
north of England, and compounded further as we approach the half
year when the prior year comparative weather was at its peak.
We have taken action to address the specific brand related
issues, including the planned launch of three new Rockstar products
at the end of the summer, and recipe improvement activity for
Rubicon juice drinks, however the benefit of these actions will not
be felt until later in the second half of the financial year.
In a transitional pricing year for our core carbonates
portfolio, led by IRN-BRU, we are seeing positive indications of
acceptance of the new price positioning. Our innovation performance
and pipeline remain strong with encouraging initial interest in our
recently launched IRN-BRU Energy product.
Funkin continues to perform strongly and the recent launch of
nitro-infused premium cocktails in cans is already exceeding
expectations.
Outlook
Revenue for the 26 weeks to 27 July 2019 is estimated to be in
the region of GBP123m, representing a c.10% decline on the prior
year (2018: GBP136m).
Despite our strong second half plan it is not expected that we
will recover fully from the volume impact in the first 5 months of
this year and the current trading we are experiencing. As a result,
we expect our profit performance for the full year to decline
versus the prior year by up to 20%.
It is also anticipated that there will be some exceptional costs
incurred in the current financial year as we take action to regain
momentum. Further guidance will be provided at the interim
results.
Roger White, Chief Executive Officer, commented:
"While the Funkin business goes from strength to strength, it
has been a challenging start to the year for Barr Soft Drinks.
Weather comparatives and trading, particularly in the impulse
on-the-go market, have been even tougher than expected which, along
with some brand specific challenges, have led to a short-term
impact on our financial performance. We are focused on returning to
growth and will continue to take the actions we believe necessary
to succeed in the dynamic environment within which we operate".
For more information, please contact:
A.G. BARR 0330 390 3900 Instinctif Partners 020 7457 2020
Roger White, Chief Executive Justine Warren
Stuart Lorimer, Finance Matthew Smallwood
Director
Next update: Interim Results - 24 September 2019
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END
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