Irn-Bru makers have blamed a dramatic drop in sales and revenue profits on disappointing weather and recipe problems.
In its half-year results, AG Barr posted turnover down just over 10 per cent from £136.9 million to £122.5 million while statutory pre-tax profits crashed by more than a quarter to £13.5 million from £18.2 million, reports Insider .
Earlier this year, the Scottish company issued a profit warning.
Chief executive Roger White said: “Our focus remains on delivering long-term growth. We have plans in place to address our specific brand related challenges and are ensuring that the business is appropriately scaled to perform in the current market.
Despite continuing economic uncertainty we expect to meet the revised profit expectations communicated in July.”
On the increased prices, it said: "We are now seeing positive indications of consumer acceptance of this new price and promotional positioning. Early indications are that increased average realised prices are compensating for the reduction in volumes experienced while shoppers readjust to new promotional price points."
The report also confirmed Martin Griffiths would stand down as chair of AG Barr's audit and risk committee and as senior non-executive independent director, while Andrew Memmott would also step down from the board as his supply chain director role will be downgraded to a divisional director role.
Some analysts saw the bright side for AG Barr .
John Moore, senior investment manager at Brewin Dolphin , said: “Investors were spooked earlier in the year by the normally reliable AG Barr’s profits warning. Following the announcement, the share price dropped nearly a third – but today’s update should provide some reassurance that there has been no further deterioration.
"The weather hasn’t been kind to the business this year and the soft drinks tax has caused issues too, leading to a sales drop on a comparative basis; but, to be fair, AG Barr had a particularly good run last year making it a tough comparator. Crucially, there is also a clear plan of action for its Rockstar and Rubicon brands, which have had their problems and were a catalyst for the profits warning.
"Perhaps the most important indicator of management’s view of the long term is the rise in dividend and continuation of the share buyback programme – they suggest the bad news this year could be a temporary blip and AG Barr is back on track.”
