Sales boosted by strong carbonates performance

Sales boosted by strong carbonates performance

Soft drinks group AG Barr has said it expects full-year profits to exceed expecations after sales in its final quarter were boosted by a strong performance from carbonates and Rubicon brands.

The UK firm said today (28 January) that it anticipates total sales to reach GBP220m (US$357.7m) for the 12 months to the end of December, representing annual growth of more than 20% on 2008.

As a result, the maker of Irn-Bru and Tizer said it expects full-year profits to be ahead of market expectations.

Despite continued volatility in input costs, the firm said margins have “held up well” as a result of cost control efforts and improvements in product mix.

"The business continues to outperform the market,” said Roger White, chief executive. “We have successfully integrated the Rubicon business adding to the growth momentum while continuing to improve sales of our existing core business.

“It is our plan to continue to invest across our business in assets, brands and people while maintaining our focus on cost and efficiency.”

White added that 2010 will be a “challenging year” with “significant” internal change to manage on top of a “continued uncertain economic outlook”.

“We remain confident in our approach and the capability of the business to deliver against these challenges,” he said.

In an interim statement this morning, the company also announced the extension of a ten-year sales and distribution contract with Rockstar Inc for the Rockstar Energy brand in the UK and Ireland.

Further, the company said that around GBP10m capital investment at its Cumbernauld site would proceed with immediate effect and that the main capital spend will be spread over financial years 2010 and 2011 with a small balance in 2012.

The firm confirmed earlier this week that it had to recall around 70,000 cans of flagship brand Irn-Bru after receiving 150 complaints about the taste. The company said that there was a “minor quality issue” with a small batch of Irn-Bru in December 2009, in which a production issue resulted in “an alteration in product taste”.