A.G. Barr, the soft drinks manufacturer that owns the Irn-bru and Rubicon brands, has posted a healthy rise in first-half profits and sales. However, the Scotland-based company warned that it was facing a hit to its second-half margins from reduced consumer confidence and increasing input costs.
Over the 26 weeks to 31 July, the group’s adjusted pre-tax profit climbed 22.8% to £25.3m on revenue up 16.7% to £157.9m.
Sales in its Barr Soft Drinks unit grew 12.3%, whilst its Funkin cocktails business was up 21.4%. Both operations benefited from a recovery in trade after the end of the Covid-related disruption, particularly in the on-trade and out-of-home sectors. Sales were also boosted by the good summer weather.
A.G. Barr’s operating margin remained at 16.2% during the period after cost inflation was offset by strong sales growth, cost controls, and price rises.
However, the group is now navigating a further rise in input costs and lower consumer spending amid a rising inflationary environment, which it expects to continue through the year.
“We anticipate in the coming months that the current economic environment will impact consumer purchasing behaviour,” said Roger White, Chief Executive of A.G. Barr.
The business stated that it was continuing to take action to mitigate the cost pressures and still expected full-year profit to come in ahead of the prior year.
