AG Barr H1 revenues slide amid coronavirus-fuelled trading volatility

Drinks maker AG Barr said on Tuesday that interim revenues had declined in 2020 as a result of "significant trading volatility" stemming from Covid-19 and lockdown measures aimed at curbing the spread of the coronavirus.

AG Barr expects revenues for the 26 weeks ended 25 July to be about 8% lower year-on-year at roughly £113m, mostly driven by an approximate 12% drop in the second quarter.

The FTSE 250-listed group said following the UK-wide commencement of lockdown on 23 March that it initially benefited from consumer stockpiling before then seeing a general shift towards larger, less frequent take-home purchasing.

However, AG Barr also stated that it was exposed to the complete closure of the hospitality sector as well as witnessing a "material reduction" in the "out of home" consumption of soft drinks.

While AG Barr said a high level of uncertainty around the rest of the trading year remained, in terms of both shopping behaviours and consumer consumption patterns, it also expects that full-year revenues will be in the region of 12-15% below the prior year - with a modest reduction in operating profit margin reflecting the impact of sales mix and operational de-leveraging.

Chief executive Roger White said: "These have been difficult times for everyone, however, despite the challenging environment, we have maintained our quality and service standards, thanks to the dedication and adaptability of our people.

"We are a profitable and cash generative business in a robust drinks sector and I am confident that our business will continue to prove its resilience for the balance of the year and beyond".

As of 0815 BST, AG Barr shares were down 0.23% at 432p.