A.G. Barr, the Cumbernauld-based maker of Irn-Bru, Rubicon energy drinks and Funkin cocktail mixers, said on Tuesday its revenue for the 27-week first half of the financial year is expected to be £134 million, 18% ahead of the 26 weeks to July 25, 2020.
On a like-for-like 26-week basis, revenue is expected to be up 13%.
The firm said the energy drinks sub category continues to outperform the total soft drinks market and that its focus on innovation in this area, primarily with Rubicon RAW Energy, has made a very positive start.
Barr also said that Funkin has capitalised on the increase in demand for cocktails at home during the lockdown periods to become “the UK’s No.1 ready to drink cocktail brand.”
Barr said: “Trading has been strong across both our business units, Barr Soft Drinks and Funkin.
“This performance has been driven by a combination of brand-led initiatives and market factors, some long-term and structural and others more one-off, resulting in a short-term boost to operating margin, which we would not expect to be replicated in H2.
“Full year operating margin is still anticipated to be slightly ahead of the prior full year …
“Over the past six months we have benefited from recovery in ‘on the go’ consumption, growing volume and improving product mix, while our ‘at home’ sales have remained strong, as they have done throughout the COVID-19 pandemic.
“Recent new product launches are performing well, with positive consumer feedback and encouraging customer listings.
“The energy sub category, in particular, continues to outperform the total soft drinks market and our focus on innovation in this area, primarily Rubicon RAW Energy, has made a very positive start.
“We plan to accelerate our commercial investment in Rubicon RAW Energy across the balance of H2 …
“The response to the COVID-19 pandemic has been especially challenging for the hospitality sector, however we are pleased to see positive momentum as consumers return to hospitality venues.
“Funkin has delivered a strong H1 performance in the on-trade driven by both customer restocking and an increase in cocktail rate of sale.
“During the various lockdown periods, Funkin capitalised on the increase in demand for cocktails at home, through both traditional retail and direct to consumer channels, becoming the UK’s No.1 ready to drink cocktail brand.
“Our ‘at home’ cocktail sales have continued to grow across the first half of the year, supported by a continued strong rate of sale and an increasing level of brand distribution.
“We will accelerate our investment in H2 as we continue our strategy to further develop Funkin as a consumer brand.”
In its outlook, Barr said: “Our positive first half performance reflects the underlying strength of the business and the encouraging performance of recent innovation launches as well as a number of non-recurring factors, in particular customer restocking, deferred overheads and marketing investment phasing choices.
“We reiterate our guidance from 20 July 2021 that profit for the current 53-week financial year ending 30 January 2022, is expected to be slightly ahead of the performance delivered in the 52-week year prior to COVID-19 (2019/20 profit before tax : £37.4m).
“Our full year performance expectations take into account the one-off nature of some of the H1 benefits and our anticipation of increased cost inflation later in the year, reflecting the well documented pressure on supply chains and rising commodity prices.
“We remain committed to our plan to recommence dividend payments during the current financial year.”
Barr CEO Roger White said: “We are pleased with the performance of the business in the year so far.
“There is good momentum behind our core brands and we have re-entered the growing big can energy category with our Rubicon RAW Energy range.
“We plan to increase our brand investment in the second half of the year, building on our progress to date.
“While uncertainty remains, we are confident in delivering our plans across the balance of the year and meeting our recently revised full year profit expectations.”
