Summer weather boosts sales at soft drinks maker A.G. BARR

23rd Sep 2013 07:23

A.G BARR's half-year profits rose as a warm UK summer helped to drive sales of soft drinks. Profit on ordinary activities before tax and exceptional items increased by 12.3% to £16.6m in the six months ended July 28th, compared to £14.8m the prior year.Total turnover jumped 5.8% to £128.7m from £121.6m as customers stocked up on soft drinks to quench their thirst during the hot months.Underlying earnings per share was up 12.6% to 11.34p from 10.07p.The company, which produces IRN-BRU, Rubicon and Strathmore water, grew its market share by 4.5% in revenue terms with volume up 3.1% during the period. However, the firm warned that competition remained intense in the soft drinks market as rivals tried to win over customers with price promotions. "We successfully navigated the challenging market conditions in the early part of 2013 and have accelerated our growth in the second quarter," said Chief Executive Roger White. "Our brands, assets and people are all performing well, benefiting from continued high levels of investment. We remain very confident in the long-term growth potential of our brands and business."During the period the group started commercial production at its new distribution at Milton Keynes which helped bolster expansion.A.G. BARR dropped its bid for a merger with Britvic earlier this year after suitable terms could not be agreed. Professional and legal costs incurred in the six months came to £2m and have been treated as exceptional costs. The cumulative costs associated with the merger amounted to £4.9m. An interim dividend of 2.825p per share was recommended, up 8% from last year's 2.616p, reflecting the board's "confidence in the current financial position and the future financial performance of the group".Looking ahead, the company expects trading to remain challenging despite the benefit of a prolonged period of good summer weather. The new site at Milton Keynes is anticipated to support growth in the second half and beyond and A.G. BARR is confident of meeting its expectations for the full year.RD