Pre Close Trading Update

RNS Number : 9569T

Barr(A.G.) PLC

24 July 2015

 

IMMEDIATE RELEASE                                                                                         24 July 2015

A.G. BARR p.l.c.

Pre Close Trading Update

A.G. BARR p.l.c. ("A.G. BARR"), the soft drinks group, announces a pre-close trading update in respect of the six months to 25 July 2015.

In the six month period to date trading has remained subdued as anticipated; the combination of tough prior year comparatives and changes to market promotional phasing, related to our Glasgow 2014 Commonwealth Games activity, along with poor weather, particularly in the north of the UK, have all had an impact on our sales performance.  In addition, our Business Process Redesign project (BPR) and the subsequent transition to a new company wide system platform  in early June has, as expected with a project of such scale and complexity, given us some short term customer service challenges which have also impacted our overall revenue performance.

Half year sales revenue is expected to be c.£128m which is a drop of c.5% on the prior year.  On an ongoing basis, allowing for the impact of the loss of the Orangina brand and the divested Findlays brand, sales declined by c.3.5%.

Market conditions have remained competitive with ongoing deflation across the soft drinks market and continued high levels of price promotion.  Despite these challenges our margins remain in line with management expectations.

The last six months have been a very busy period at A.G. BARR with the closure of our Tredegar site, commissioning of carton packaging capability at Milton Keynes, the acquisition of Funkin and the go-live of our BPR project, however all of these actions will lay the foundations for further growth and operational improvement.  Our objective for the second half of the year is to bring improved operational stability and growth to the business and to begin to realise the benefits associated with the changes we have made. 

Our balance sheet remains strong and our capital investment plans are in line with management expectations.

Outlook

As expected at the start of the year, our financial performance in the current financial year will be more weighted to the second half given our strong performance in the first half of last year, combined with the significant operational improvement programme currently being implemented.

We expect trading across the market will remain competitive, however assuming there are no significant changes to the competitive or customer landscape and that we continue to make good progress on all our change initiatives, we plan to regain sales momentum which would enable us to meet our expectations for the full year.  We will provide a further more detailed update in our interim results on 22 September 2015.

A.G. BARR	Tel:  [phone]
Roger White, Chief Executive
Stuart Lorimer, Finance Director
Instinctif	Tel:  [phone]
Justine Warren
Matthew Smallwood

 

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