Pre close trading update

RNS Number : 6408I

Barr(A.G.) PLC

27 July 2012

 



A.G. BARR p.l.c.

Pre close trading update

A.G. BARR p.l.c., the soft drinks group, will announce its interim financial results for the six months to 28 July on 24 September 2012.

As has been widely reported during the course of 2012 the total soft drinks market has seen some marked changes in overall performance, in particular from March onwards when the market was significantly impacted by adverse weather.  For the 26 weeks to 23 June 2012, Nielsen reported the total soft drinks market volumes down 1% whilst value was 2% ahead.  Within this overall performance, carbonates volume was flat with stills declining by 3%.  The carbonates category was once more driven strongly by the energy segment, which grew in value by 11% over the time frame.

In recent weeks the weather has been extremely poor, with record levels of rainfall and we expect this will have had a further negative impact on market performance when the data is available for the remainder of June and July.

During these difficult trading months, A.G. Barr has continued to grow strongly ahead of the market and we anticipate sales revenue of c.£130m, an increase of over 4.5% on the prior year.

Despite the difficult operating conditions, we have maintained our strategy of investing in brand equity and extending distribution.  Our core brands continue to respond well to this consistent long term approach.

Margins in the period have been impacted by increases to cost of goods, increased brand investment and adverse changes to our sales mix at brand, pack and channel level and as a result we expect profits in the first six months to be slightly below the prior year.  We anticipate that margins will improve in the second half but that it is unlikely to offset the margin shortfalls of the first half.

Our operational focus has been to deliver a strong level of customer service across our business at the same time as we develop the detailed execution plans for our investment in the Crossley site, at Milton Keynes.  We have now completed all of the development actions for Crossley and having obtained detailed planning approval we have now committed to the full project, including a new credit facility through HSBC to support the development.  We anticipate, as previously guided, a full project budget of c.£41m and a production commencement date for the site in the third quarter of 2013.

Over the period our balance sheet remains strong and our capital investment plans are in line with our expectations.

Outlook

Despite the significant impact of unprecedented weather on the market in the early summer, we have delivered solid growth as our brands have responded extremely positively to continued development and investment.  Assuming there will be no further deterioration in the market place we anticipate further growth and margin improvements in the second half.  We plan to maintain our long term agenda of investing in brands and developing the infrastructure and organisation capable of delivering future growth.

27 July 2012

Enquiries:

A.G. Barr	Tel: [phone]
Roger White, Chief Executive
Alex Short, Finance Director
College Hill	Tel: [phone]
Justine Warren
Matthew Smallwood

 

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