Irn-Bru makers AG Barr’s sales in the third-quarter had less fizz but the company is confident it will meet full-year targets if current market conditions continue.
Revenues in the 18 weeks to November 30 decreased marginally by 0.6% on a like-for-like basis, adjusted for the termination of its contract for Orangina with Lucozade Ribena Suntory Group.
Revenue for the year excluding Orangina grew by 3.5%, outstripping the 0.4% rise in the total soft drinks market.
The Cumbernauld-based soft drinks maker said revenue performance in the third quarter slowed from the very strong growth in the first half, as was anticipated.
The company believed the slower performance was driven by lower promotional activity, wholesaler de-stocking and “a very competitive price-driven trading environment in a soft drinks market which was in revenue decline.”
Costs would continue to be tightly controlled across the business and as a result margins would continue to be in line with expectations.
The AG Barr statement continued: “The soft drinks market remains dynamic and competitive as we approach the key festive trading period.
“We have a strong trading plan to drive growth despite the tough year-on-year comparatives and competitive environment in which we operate.
“Assuming current market conditions continue, we remain confident of delivering our full-year performance expectations and look forward to further growth in the next financial year.”
Non-recurring income from Orangina’s early exit was £600,000 but Barr recently agreed a new 10-year contract with US drinks giant Dr Pepper Snapple Group is due to commence in January next year.
Barr will sell, market and distribute the Snapple brand of tea and juice drinks in the UK and some EU territories, and both companies will work in partnership “to identify further expansion opportunities in Europe” or the product.
AG Barr also notes it is making “good progress” with capacity and efficiency investments at its new site in Milton Keynes.
Shares in AG Barr were down 13.50 to 587.00 yesterday.