Hot spell boosts Barr's prospects: Dearer sugar takes its toll on profits
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.THE RECENT hot spell in the South of England has given A G Barr, the maker of Irn Bru and Tizer, hope that sales of soft drinks will improve as the summer wears on.
But an 18 per cent rise in the price of sugar following devaluation of the pound and the fall in value of the green pound dented profits at Barr, which made pounds 2.1m before tax in the six months to 1 May. The pounds 3m profits in the equivalent period the previous year were, however, inflated by an exceptional gain of pounds 409,000 from the sale of an investment in Taveners.
But Barr gained from an interest charge 38 per cent lower, the impact on borrowings of the cash from the Taveners sale and the inherent cash generation of the business.
Robin Barr, chairman, said that the weather was hugely important for soft drinks sales. 'Unfortunately the recent good weather seems to have stopped at Watford, while our products are stronger in Scotland and the North of England,' he said.
'Sales in the nine weeks since 1 May are down about 10 per cent, but we are not despairing because the comparable period last year was very good. But then the weather was very poor in July and August, so we are hoping sales will be at worst neutral.'
Irn Bru is the second biggest brand in Scotland after Coca-Cola, and Mr Barr said the company was now directing its marketing more at the South of England.
Barr had now passed on some of the sugar price increase, but fierce price competition made it impossible to recoup the loss in margin fully.
The company is investing about pounds 750,000 in a production line in Glasgow to produce new 250ml plastic bottles of Irn Bru to cope with higher- than-expected demand.
Turnover was 1 per cent lower at pounds 42m. Earnings per share fell to 7.7p (10.7p) and the shares stuck at 365p.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments