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AG Barr Outperforms UK Soft Drinks Market

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AG Barr Outperforms UK Soft Drinks Market

AG Barr Outperforms UK Soft Drinks Market
March 22
12:32 2013

AG Barr has grown revenue and volume well ahead of the UK soft drinks market in both the carbonates and still segments during the 52 weeks to 26 January 2013. Sales increased by 6.6% to £237.6 million and underlying pre-tax profits rose by 4.3% to £35.0 million. Exceptional items amounted to £3.2 million, primarily relating to professional and legal fees in connection with the proposed all-share merger with Britvic.

Raw material cost inflation and volatility continued to be a feature in 2012 which, coupled with the increased cost of promotion, impacted on margins. However, this was partially mitigated by AG Barr’s cost control and pricing actions.

The overall the UK soft drinks market experienced carbonates growth of 3.8% in value but was in marginal decline in volume terms, whilst the still segment grew value by 1.9% with volume declining 1.0%. During the 52 weeks to 26 January 2013, AG Barr grew carbonates revenue by 7.1% and volume by 6.0%. Stills also performed well relative to the market, growing revenue by 4.3% and volume by 4.1%. The soft drinks producer’s performance was driven by consistent growth across the portfolio, with carbonates particularly benefiting from the double digit growth in the Barr range and the significant growth in the Rockstar brand. Stills continue to grow steadily as AG Barr further developed its exotic brands Rubicon and KA.

Roger White, chief executive of AG Barr, comments: “AG Barr has delivered a robust financial performance and continued to grow well ahead of the UK soft drinks market in the period. This once more proves the resilience of our operating model and the potential of our brands. Across the year, market conditions have remained difficult, specifically impacted by poor summer weather and further cost of goods inflation. Despite the added distraction of the merger discussions with Britvic plc, the business has remained focused and delivered all of the ‘business as usual’ operating plans across the year.”

Following referral of the proposed merger between AG Barr and Britvic to the Competition Commission, both companies are working with the Competition Commission during its investigation with a view to seeking clearance for the deal.

“While we await the Competition Commission’s findings, we will continue to build and develop our plans to ensure the long term success of AG Barr as a standalone business,” he adds. “We remain confident in our future prospects both as a standalone business and combined with Britvic plc.”

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