Irn-Bru Maker A.G. Barr Posts Lower Profit, Maintains FY Outlook
Irn-Bru maker A.G.Barr posted lower first-half profit on Tuesday as higher prices hit demand, while the British soft drinks maker maintained its full-year outlook.
The company's pretax profit dropped to £13.5 million ($16.79 million), for the six months ended 27 July, compared with £18.2 million last year.
Britain's soft drinks makers were hit last year by the introduction of a sugar tax. Unlike some rivals, A.G. Barr cut prices, while also reducing the level of sugar in its drinks.
However, the company increased prices of its drinks this year.
"With hindsight, we did however underestimate the volume benefit we received in 2018 from both one-off trading factors and favourable weather," said the company.
Britain's Prime Minister Boris Johnson had earlier said he would launch a review of so-called sin taxes on products high in salt, fat and sugar.
"As disclosed with the July update, the weaker-than-expected start to the year reflects a combination of factors including spring and summer weather in the core Scottish and north of England markets, as well as brand-specific issues at Rockstar and Rubicon," Shore Capital analysts said.
Analysts have cited increased competition in the energy drinks category and formulation misjudgments for its juice drinks business.
A.G. Barr said it was planning to launch three Rockstar products in autumn, and will also improve the recipe for Rubicon, but the British company will not see the benefits until the second half of the financial year.