AG Barr has reaffirmed its full-year profit guidance despite supply chain disruptions that weighed on a strong revenue performance in the UK soft-drinks group's first half.
In a trading update today (4 August), the Irn-Bru maker said its revenue for the 26 weeks ended 1 August is expected to be around £246m ($330.8m), up 8% on the same period last year.
AG Barr said it was “pleased” with its performance but acknowledged its second-quarter revenue was affected by reduced stock availability.
The disruption was mainly linked to internal supply-chain issues tied to a “capability and capacity change programme” and worsened by external issues related to third party manufacturing, the group added.
AG Barr estimated the problems hit its first-half revenue by roughly £10m. The group will report interim results on 29 September.
The company said it expects an “improved revenue performance” in its second half driven by “market share gains, encouraging innovation performance and supply chain actions”.
It is also forecasting “double-digit percentage revenue growth” for the full year.
Shares in AG Barr were down as much as 6.51% by midday UK time, trading at 603p at 11:43 BST.
The company added its core brands, including Irn-Bru, Rubicon and Boost, are “performing strongly”.
However, "weakness" from Funkin and Barr Brands partly offset the gains elsewhere.
On the M&A front, AG Barr said it completed the integration of UK firms Fentimans and Frobishers during the first half. Operational efficiencies from the deals, announced earlier this year, are expected to start feeding through in the second half.
The group also confirmed its manufacturing investment programme “remains on track and within budget”.
AG Barr CEO Euan Sutherland said: “Consumer demand for our brands is strong, with all core brands gaining market share. The supply constraints which impacted Q2 performance are being resolved and, with strengthening trading momentum driven by our refreshed core brands and new product development, we remain confident for the full year.”
