AG Barr posts rise in H1 profit and dividend but profit takes a hit
Soft drinks maker AG Barr posted a rise in interim revenue on Tuesday and said it was on track to meet its expectations for the year, but profit fell due to higher cost inflation and brand investment.
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In the six months to 29 July, total revenue was up 8.8% to £136.6m but pre-tax profit declined to £19.4m from £21.1m in the same period a year ago. Meanwhile, the company upped its interim dividend to 3.71p per share from 3.53p.
The operating margin at the Irn-Bru maker fell to 13.2% from 13.9% the year before on the back of increased brand investment and sector cost pressures related to the ongoing weakness of the pound. However the margin impact has been lessened through the combination of the business re-organisation, completed early in 2017, and price increases, albeit these were implemented later than anticipated.
Chief executive Roger White said: "The strong sales momentum of the second half of last year has continued and has combined with significant progress from our innovation to deliver strong sales growth and market share gains in the period.
"While we maintain tight cost control across the business, we have increased investment in the support of our brands and innovation launches and expect to continue this across the full year. Our reformulation activities remain on track as we move into the final implementation stages of this initiative in what will be a busy second half.
"Although the soft drinks market has been impacted negatively in the short term by the mixed weather since late July, assuming market conditions across the balance of the year are reasonable, the company remains on course to meet the Board's expectations for the full year."