Trading boost puts AG Barr on track to meet full-year profit guidance
Irn-Bru maker AG Barr said cost controls and a bump in second-half trading have put it on track to meet full-year profit guidance, but flagged another challenging year ahead.
The Cumbernauld-based firm said it will meet profit expectations despite a slight dip in revenue to £257 million for the 52 weeks to January 28, compared with £258.6 million a year earlier.
New products launches like Irn-Bru Xtra and Rubicon Spring helped boost trading in the second half of the year.
AG Barr, which also produces Snapple and Strathmore water, said it managed to maintain "tight control" of costs, while a company-wide overhaul helped cut overheads in the fourth quarter.
It is investing £10 million in its production and distribution centre in Milton Keynes.
In September, AG Barr announced it was cutting 90 jobs and was grappling with a shift in consumer tastes towards low-sugar drinks after the Government announced plans for a sugar tax in 2018.
The job cuts, which accounted for around 10% of the workforce, was part of a company-wide revamp expected to cost around £4 million.
AG Barr said it does not expect market conditions to improve this year.
"Looking ahead, the uncertain economic environment indicates that 2017 will be another challenging year for UK-based businesses.
"However our strong and flexible business model, our differentiated brands and our well-invested asset base ensure we are well placed to continue to deliver long-term value to shareholders," the company said in its trading update.
AG Barr is set to report full-year results on March 28.