THE maker of fizzy drink Irn-Bru has put the focus on its own “market-beating” performance as it gears up for a potential merger with Britvic.
Cumbernauld-based AG Barr posted an 8% drop in underlying half-year profits to £14.9m, but said its 2.8% growth in sales volumes was favourable compared with a 1.5% decline in the wider market for take-home soft drinks.
Higher raw material costs – particularly sugar – and the wet summer weather have also impacted the industry, which is increasingly promotions driven.
Barr said merger talks with Tango maker Britvic were ongoing, adding that sales in the first seven weeks of its second half have shown double-digit growth, up from the 5% rise in turnover to £130m for the first half.
Chief executive Roger White said: “We are particularly pleased with our financial performance given the ongoing challenging environment.
“We have continued to outperform, delivering further consistent growth in volume and value ahead of a market which has seen volume declines in the period.”
The proposed merger deal, valuing the firms at a combined £1.4bn, would create one of the leading soft drinks companies in Europe, with other brands including the Britvic products Robinsons, J2O and Fruit Shoot. Barr, which dates back to 1875, also makes Tizer and Rubicon fruit juice.
It has already been agreed that shareholders of Essex-based Britvic will own 63% of the new company. There is a Takeover Panel deadline of 5pm on October 3 for a deal to be announced.
Chairmanship of the company passed outside the family for the first time in 2009 when Robin Barr ended his 31-year tenure as chairman.
He remains on the company’s board as a non-executive director and is one of just three people to know the formula of 32 ingredients used in Irn-Bru.
The current business has won praise from City analysts for its performance after increasing sales of Irn-Bru away from its historical heartland.
Panmure Gordon analyst Damian McNeela said today: “The company continues to make good progress in increasing distribution and recovering higher input costs.”