TIDMBAG
RNS Number : 3189H
Barr(A.G.) PLC
03 August 2021
IMMEDIATE RELEASE 3 August 2021
A.G. BARR p.l.c.
("A.G. BARR")
A.G. BARR produces and markets some of the UK's leading drinks
brands, including IRN-BRU, Rubicon and Funkin.
H1 trading update to 1 August 2021
Revenue for the 27-week first half of the financial year is
expected to be c.GBP134m, c.18% ahead of the prior year (26 weeks
to 25 July 2020 : GBP113.2m). On a like-for-like 26-week basis
revenue is expected to be up c.13%.
Trading has been strong across both our business units, Barr
Soft Drinks and Funkin. This performance has been driven by a
combination of brand-led initiatives and market factors, some
long-term and structural and others more one-off, resulting in a
short-term boost to operating margin, which we would not expect to
be replicated in H2. Full year operating margin is still
anticipated to be slightly ahead of the prior full year.
Barr Soft Drinks
Over the past 6 months we have benefited from recovery in "on
the go" consumption, growing volume and improving product mix,
while our "at home" sales have remained strong, as they have done
throughout the COVID-19 pandemic. Recent new product launches are
performing well, with positive consumer feedback and encouraging
customer listings.
The energy sub category, in particular, continues to outperform
the total soft drinks market and our focus on innovation in this
area, primarily Rubicon RAW Energy, has made a very positive start.
We plan to accelerate our commercial investment in Rubicon RAW
Energy across the balance of H2.
Funkin
The response to the COVID-19 pandemic has been especially
challenging for the hospitality sector, however we are pleased to
see positive momentum as consumers return to hospitality venues.
Funkin has delivered a strong H1 performance in the on-trade driven
by both customer restocking and an increase in cocktail rate of
sale.
During the various lockdown periods, Funkin capitalised on the
increase in demand for cocktails at home, through both traditional
retail and direct to consumer channels, becoming the UK's No.1
ready to drink cocktail brand*. Our "at home" cocktail sales have
continued to grow across the first half of the year, supported by a
continued strong rate of sale and an increasing level of brand
distribution. We will accelerate our investment in H2 as we
continue our strategy to further develop Funkin as a consumer
brand.
Operations
We continue to put the safety and wellbeing of our employees and
customers at the heart of our business.
Our operational resilience has been excellent across the first
half of the year. In recent weeks, however, we have seen increased
challenges associated in part with the COVID-19 pandemic, across
the UK road haulage fleet, impacting customer deliveries and
inbound materials. In addition, the risks associated with the wider
labour pool and the current COVID-19 pandemic response, are areas
we continue to monitor closely.
We believe the commitment and capability of our workforce and
supply base will stand us in good stead in these uncertain
times.
Outlook
Our positive first half performance reflects the underlying
strength of the business and the encouraging performance of recent
innovation launches as well as a number of non-recurring factors,
in particular customer restocking, deferred overheads and marketing
investment phasing choices.
We reiterate our guidance from 20 July 2021 that profit for the
current 53-week financial year ending 30 January 2022, is expected
to be slightly ahead of the performance delivered in the 52-week
year prior to COVID-19 (2019/20 profit before tax : GBP37.4m).
Our full year performance expectations take into account the
one-off nature of some of the H1 benefits and our anticipation of
increased cost inflation later in the year, reflecting the well
documented pressure on supply chains and rising commodity
prices.
We remain committed to our plan to recommence dividend payments
during the current financial year.
Roger White, Chief Executive, commented:
"We are pleased with the performance of the business in the year
so far. There is good momentum behind our core brands and we have
re-entered the growing big can energy category with our Rubicon RAW
Energy range.
We plan to increase our brand investment in the second half of
the year, building on our progress to date. While uncertainty
remains, we are confident in delivering our plans across the
balance of the year and meeting our recently revised full year
profit expectations."
For more information, please contact :
A.G. BARR 0330 390 3900 Instinctif Partners 020 7457 2010/05
Roger White, Chief Executive Justine Warren
Stuart Lorimer, Finance Director Matthew Smallwood
Next update : Interim Results - September 2021
* Nielsen pre-mixed alcoholic drinks total coverage value sales
data MAT 03/07/2021
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