Strathmore Springs Parent Company Announces Trading UpdateNeil Hardie
A.G. Barr p.l.c., which produces and markets some of the UK’s leading drinks brands, including Irn-Bru, Rubicon, Strathmore and Funkin, announced a trading update in respect of the financial year ended 25 January 2020.
Adjusted profit before tax performance is expected to be at the top end of current market expectations, just ahead of £37m. Revenue for the period is expected to be c. £255m (2018: £279m).
They faced a combination of challenging trading conditions during the year, particularly across the summer period. In addition, following their 2018 volume-led strategy, across 2019 they adjusted the promotional and pricing position to align more closely with the market. While this had an expected impact on volume, it has delivered an increase in average realised price, re-establishing their consumer pricing position.
The Rockstar and Rubicon recovery plans are now being implemented, IRN-BRU has returned to growth in the final quarter and Funkin continues to perform strongly.
They have completed the first phase of our business re-engineering programme. The associated exceptional costs in the period of £1.5 – £2m are expected to be almost entirely offset by a one-off exceptional gain related to the removal of a wind turbine at their Cumbernauld site.2
The business remains strongly cash generative and, as planned, the £30m share repurchase programme completed during the period. Their balance sheet remains robust.
The external landscape remains challenging, however, they exit the year with encouraging trading momentum which we expect to continue into 2020.
Commenting on the results, Roger White, Chief Executive, said: “Our focus remains on the delivery of long-term value growth. We are taking action to reset our business and we enter the new financial year with confidence and a strong trading plan.”