Cumbernauld-based Irn-Bru maker A.G. Barr said on Tuesday its revenue fell 7.6% to £113.2 million in the six months ended July 25, 2020, and statutory profit before tax fell 62% to £5.1 million amid a £10 million impairment charge connected to its Strathmore brand.
However, Barr’s shares rose about 16% as it said “it is expected that we will resume dividend payments in 2021.”
Barr’s other brands include Rubicon, Strathmore and Funkin.
Profit before tax and exceptional items rose 19.4% to £16.6 million.
On exceptional the charges, Barr said: “In the period, we have reported a pre-tax exceptional charge of £11.5m (£10m non-cash and £1.5m cash).
“This covers … our ongoing business re-engineering programme, which commenced in 2019 and has been extended in 2020 in light of the impact of COVID-19.
“In the first 6 months of the current financial year £1.5m costs are primarily associated with redundancy payments related to this programme which will complete in January 2021 …
” … and … following a review of our intangible asset brand valuations, a £10m impairment of our Strathmore brand and assets which has been significantly affected by the challenges in the hospitality sector.”
In its outlook, Barr said: “Our current scenario planning, based on an underlying assumption that the UK will not enter into a further significant period of lockdown, continues to indicate that our full year revenue performance for the year ending January 2021 will be in the region of 12-15% below the prior year, with a modest reduction in operating profit margin reflecting the impact of adverse sales mix and operational de-leverage, mitigated by our strong delivery of ongoing overhead cost savings.”
Barr CEO Roger White said: “We remain on course to deliver a full year performance in line with the revised expectations we communicated in the July 2020 trading update.
“We have continued to invest in our core brand equity for the long term, maintained our quality and service standards and remain a profitable and cash generative business in a robust drinks sector.
“We are confident that our business will continue to prove its resilience for the balance of this year and beyond.”