A famous Scottish soft drinks maker has hailed a major advertising campaign in the first update to the City under its new chief executive.
Cumbernauld-based Irn-Bru manufacturer AG Barr said a new advert for the drink linked to the Scotland men’s football team qualifying for the Euro 2024 tournament had been “highly successful”.
The drinks maker named Euan Sutherland as its new chief executive and confirmed the departure date for the outgoing Roger White earlier this year and the firm said this is the first update with him in position. Former Superdry and Co-op chief Mr Sutherland took over in May.
The firm reported “growth in volume and value supported by a highly successful Euros media campaign” for Irn-Bru.
The company said sales of its soft drinks increased by around 7% this year. It expects to report total sales of about £221 million for the six months to the end of July, 5% higher than the prior year.
AG Barr said that sales of Irn-Bru, the sparkling soft drink launched in Scotland more than a century ago, were higher in terms of both value and volume – meaning it sold more than a year ago.
It also said growing demand for Irn-Bru among English customers has helped boost sales for owner AG Barr.
Rubicon also enjoyed double-digit percentage sales growth which was helped by increased spending on marketing campaigns.
Mr Sutherland said the group’s four “power brands”, which also include sports drink Boost and pre-mixed cocktail brand Funkin, had “clear paths to long-term growth”.
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Funkin sales were impacted by issues including can production, and pressures in the hospitality sector which has particularly squeezed clubs and bars.
Mr Sutherland said: “I am pleased to report overall H1 revenue growth of c.5% with Soft Drinks growth of c.7%, against strong prior year comparatives. The strategic margin rebuild programmes are on plan, guidance on revenue and margin remains unchanged, and we are on track to meet FY expectations.
“Our four power brands - Irn-Bru, Rubicon, Boost and Funkin - have clear paths to long term growth, supported by strong innovation programmes across all of our portfolio and opportunities to work even more closely to add value to our customers, in all channels.
“We continue to invest in our supply chain which will deliver tangible benefits as we insource more of our volume, build capacity to support our growth plans, improve resilience and enhance our margins.
“We have a clear and focussed UK based growth strategy with simple KPIs of Net Revenue, Operating Margin and Roce.”
Looking ahead, AG Barr said it was expecting revenues to grow further.
The drinks firm earlier this year unveiled plans to cut almost 200 jobs as part of the closure of direct sales operations at three sites across the UK.
It affected its sites in Moston, Greater Manchester; Wednesbury near Birmingham; and Dagenham, Greater London.
The firm said that “the Barr Direct route to market closed at the end of June with no impact to customer service”.
It added: “Symbol and independent retailers are now fully serviced through the wholesale channel, supported by a larger field sales team.
“The integration of Boost into Barr Soft Drinks is on track and will be completed in H2. Manufacturing synergies continue to be realised as production is insourced.
“As previously stated, these two projects are expected to give rise to a one-off cost of c.£5m in the 2024/25 financial year, the majority of which will be incurred in H1.”
It added that Jonathan Kemp, commercial director, will retire later in the year and Dino Labbate has been appointed to the role.
Analysts Shore Capital said: “AG Barr, the owner and manufacturer of a number of the UK’s leading soft drinks brands, has issued what to us is a good trading update for the 26 weeks ended 27 July 2024.
“Trading has been ‘strong’, despite the lack of spring/summer weather, with group revenue of c.5% including c.7% growth in soft drinks and the Boost-driven margin rebuild ‘on plan’.”
Shares in AG Barr closed up 2.22%, or 14p, at 644p.
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