Irn-Bru Firm Barr scraps dividend, furloughs, cuts pay

Cumbernauld-based Irn-Bru maker A.G. Barr said on Wednesday its revenue fell 8.4% to £255.7 million and profit before tax fell 16% to £37.4 million in the 52 weeks ended January 25, 2020.

Barr said it now expects “a material adverse impact to the group’s financial performance” due to the coronavirus crisis “however at the current time the quantum of this remains uncertain.”

The company said it will not propose a final dividend as it moves to conserve cash.

“The group has a strong financial base and our balance sheet is robust, with net cash in the bank of £10.9m at the financial year end, however given the highly unusual circumstances arising from COVID-19, we believe it is important to conserve cash at this time and maintain maximum balance sheet flexibility,” said Barr.

“We have drawn down our £60m revolving credit facilities in full. 

“In addition, we have now frozen all new capital projects, as well as scaling back immediate marketing and commercial activity where sensible across the group. 

“In accordance with the Government’s Job Retention Scheme, we have commenced the ‘furlough’ process for a limited number of colleagues at this stage. 

“In addition the board and senior executive team have agreed to a voluntary 20% salary reduction for a minimum of three months to help support the business through these difficult times. 

“We continue to take a prudent and vigilant approach to all working capital to minimise risk in the current climate.

“The board is not proposing a final dividend at this time, and will review the dividend position when there is greater visibility of the impact of COVID-19.”

Barr’s other brands include Rubicon, Strathmore and Funkin.

Barr CEO Roger White said: “We exited the financial year with improved trading performance and momentum, which continued into the new year however the COVID-19 situation is now materially impacting our business. 

“There is no immediate certainty around the severity and duration of the impact on our business and as such the board is unable to provide guidance for the current financial year at this time. 

“However, the actions we are taking to conserve cash and reduce costs, combined with our strong financial base, give us confidence in the resilience of our business for the long term.

“We will continue to monitor developments closely, responding appropriately as required, while also ensuring that we play our part in supporting our communities through these unprecedented times.”