AG Barr maintains market share in challenging soft drinks market

Challenging conditions in the soft drinks market have taken some of the fizz out of AG Barr, with first-half revenues down on the previous year and management only expecting to hit full year profit forecasts if the market improves and 'robust' second half plans come to fruition.

In a trading update for the six months to 30 July, the Irn Bru maker said revenue in the period would fall 2.9% on a like-for-like basis to roughly £125m.

However, against a backdrop of a soft drinks market where values fell 0.8% and volumes were down 0.4%, with indications that the poor weather over most of June and into July will further adversely impact the total market performance, AG Barr said it maintained both value and volume overall market share.

Responding to changing consumer preferences, a new sugar-free variant called Irn Bru Xtra was launched, along with three major new lower sugar products for Rubicon and Snapple Iced Tea, which were all "showing encouraging early signs with both customers and consumers".

The FTSE 250-listed company said its recent 'business process redesign' investment was said to be already producing customer service benefits and management have, despite the challenging market conditions, "remained focused on delivering against our strategy, launching relevant new products, closely controlling costs, managing risk and ensuring we generate strong free cash flow".

Although the impact of weaker sterling is not expected to have a significant impact in 2016, input costs are predicted to increase in 2017, "providing management time to adjust plans accordingly".