AG Barr warned that sales are expected to drop by 3% in the six months to 30 July

AG Barr warned that sales are expected to drop by 3% in the six months to 30 July

AG Barr has warned that Brexit will inflate costs next year as currency falls from the vote eventually make an impact.

The Irn Bru maker said today the UK's decision to leave the EU has created "economic uncertainty" and a weaker Sterling. However, it said the effects will not be felt until 2017, giving the company time "to adjust plans accordingly".

Meanwhile, management warned that sales in the six months to 30 July are expected to be down 3% amid a declining and "highly competitive" market. According to IRI figures cited by AG Barr, the UK soft drinks market was down 0.8% in value and by 0.4% in volumes from 31 January to 19 June, driven by wet weather in June and July. Despite the difficult trading conditions, AG Barr said it had maintained both value and volume market share.

It added: "The balance of the summer will remain an important trading period, however assuming market conditions improve and our robust second half plans deliver, we expect to meet our profit expectations for the full year."

AG Barr will deliver its first-half results on 27 September.

In full-year results for 2015, sales were down 1% but profits jumped by 14% on the back of falling costs.