Irn-Bru maker plans more sugar reduction investment

By Matt Atherton contact

- Last updated on GMT

AG Barr reported an 8.8% rise in sales
AG Barr reported an 8.8% rise in sales

Related tags: Ag barr, Soft drinks, Soft drink, Cream soda

Irn-Bru maker AG Barr plans to invest more in cutting sugar this year, as it reported an 8.8% rise in sales in its latest trading update.

AG Barr chief executive Roger White said: “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.

“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.”

£300,000 investment

The Scottish manufacturer’s revenue reached £137M in the six months to July 29, and adjusted pre-tax profit before exceptional items was up 2.9% to £17.5M.

The firm’s sales benefited from a £300,000 investment to cut its sugar content in Irn-Bru, and AG Barr will continue to work on meeting the government’s sugar reduction targets. It comes after the manufacturer planned a 50% sugar reduction in Irn-Bru before the end of 2017.

Earnings per share increased 5% to 371p over the six months, AG Barr reported. But, price inflation and investment squeezed profit margins to 13.2%, down from 13.9%.

AG Barr’s overall market share increased over the period, it said. Its soft drinks sales significantly outperformed the market, which grew 4.2% in the 26 weeks to July 30, it added.

‘Strong sales momentum’

“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,”​ White said.

“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.”

Meanwhile, in March, AG Barr revealed its plan to cut Irn-Bru’s sugar content​ by 50% before the end of the year. It wanted to reduce sugar in the soft drink from 10.3g per 100ml to 5g – the equivalent of a 74-calorie reduction per 330ml can.

AG Barr six-month trading update – at a glance

  • Revenue up 8.8% to £136.6M
  • Adjusted pre-tax profit, before exceptional items, up 2.9% to £17.5M
  • Reformulation investment to continue over next six months

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