Commonwealth lift for AG Barr brands

Carbonated drinks brought in £102.6m, up from £98.2m, while still drinks and water edged higher from £29.8m to £31.6m.

Revenue from other products, including Irn-Bru ice cream, water coolers and rental of vending machines, almost doubled to £1.45m.

Sales value was said to be 6.5 per cent up in England and Wales, 4.9 per cent ahead internationally and have grown 4.5 per cent in Scotland.

Underlying pre-tax profits were up 11 per cent to £18.4m with the company hailing the positive impact of its association with the Commonwealth Games in Glasgow.

Chief executive Roger White said: "I'm very pleased to have delivered a good, strong broad-based bit of growth in revenue terms and seen it drop to the bottom line in terms of profits."

The company said the Commonwealth Games had provided a lift for the Irn-Bru, Rubicon, Barr and Strathmore brands. It said: "We not only provided all of the venues and athletes with these brands on an exclusive basis but Strathmore was also highly visible on the field of play across all of the Games venues."

Mr White said: "It was about strengthening our emotional connection with our consumers in our core market and I think we did a good job of that."

AG Barr also announced it has agreed a long-term partnership with the New York Stock Exchange listed Dr Pepper Snapple Group. The Scottish company will distribute a range of fruit juices and iced teas across the UK and Ireland as well as in Germany and Norway.

Mr White said: "We have been talking to the guys at Snapple for a little while now. We approached them and said we think we can do a job for you and we think there is a lot of potential in the brand (which) has been not delivered so far.

"We currently sell a little bit of Snapple in the UK but it has never really had any care and attention from either the brand owners or from anybody else in the supply chain.

"It is our objective once we get hold of it in the new year to get on with it and do a proper job with it."

Andrew Bayfield, from Dr Pepper Snapple Group, said: "We see an opportunity to build Snapple in Europe over the long term. AG BARR has the capabilities to help unlock the potential of the brand in those markets, and we're looking forward to working with them."

In the financial update the company recorded a £600,000 exceptional gain related to the early ending of its distribution contract for Orangina by the recently formed Lucozade Ribena Suntory Group.

However AG Barr recognised £2.5m of exceptional costs including £700,000 related to redundancy in finance, telesales and the supply chain as well as a further £1m to cover redundancy payments at the Tredegar carton packing site it is closing in South Wales. There was a £1.4m impairment charge on the assets of that site but also a £500,000 pension credit reflecting the lower number of employees in the company's scheme.

On a statutory basis pre-tax profit grew from £13.2m to £16.5m.

During the six months AG Barr took out two new £10m credit facilities with banks which, according to Mr White, are for general working capital. The company's telesales and back office functions have now been concentrated in a recently refurbished office block adjacent to its North Lanarkshire HQ. This brought some jobs from around the UK back into AG Barr's Scottish operation. With the planned closure in Tredegar the company is also expanding its Milton Keynes facility.

Mr White said: "We will be putting in slightly more modern, faster, bigger bits of carton packaging equipment and there will be a benefit from an efficiency point of view and also a supply chain point of view.

"Overall it should make us a more efficient business."

House broker Investec suggested AG Barr may be close to a net cash position by the year end, with net debt at July 27 standing at £3.7m.

Investec said: "The markets continue to be challenging but Barr remains confident in the long term potential of the business."

AG Barr shares closed down 1p, or 0.16 per cent, at 630.5p.