Profit and revenue turn flat at Irn Bru owner AG Barr following rollercoaster year
AG Barr saw profits and revenue fell in 2020 relative to the previous year, following a volatile and unpredictable year.
Revenue at the firm, which owns brands Irn Bru and Rubicon, stood at £227m for its 2021 financial year, down 11 per cent from 2020, where revenue stood at £255.7m.
The firm’s profit before tax also fell in 2021, from £37.4m in 2020 to £32.8m, a drop of 12.3 per cent.
Nevertheless, the business is optimistic about its 2022 financial year and plans to resume paying a divided at some point this financial year.
Chief executive Roger White said AG Barr had delivered resilience results despite a difficult year.
“Across the year, we continued to focus on our key strategic initiatives. We have significantly progressed our multi-beverage strategy, extended our reach into new channels and accelerated our roadmap towards net zero, which we aim to deliver by 2040.
“We closed the year in strong financial health, with our brands and business poised for growth on a like for like basis, and with the clear intention to recommence dividend payments in 2021.
“Whilst there now appears to be a route out of lockdown, the immediate future remains uncertain. Notwithstanding this current backdrop, our strategy for the year ahead is to support our core growth initiatives with significant investment.”
By mid-morning AG Barr’s stock price had fallen 2.11 per cent to 510p.
The Covid-19 pandemic started to impact the business at the end of March 2020, when the UK entered its first national lockdown. AG Barr’s ‘out of home’ consumption of soft drinks was affected, and as a result revenue fell 9.1 per cent in Q1.
The business then benefitted from favourable weather during the summer months, and sales began to rise, particularly in its ‘on the go’ consumption segment. In Q2, revenue declined 6.4 per cent, meaning revenue for H1 was down 7.6 per cent.
More coronavirus restrictions hit the business hard, and revenue fell again in H2, down 14.6 per cent.
Julie Palmer, partner and restructuring expert at Begbies Traynor, said: “For the past few years AG Barr has been going through some tough times. The drinks maker has also had the fizz kicked out of its results from the pandemic with the closure of pubs and the lack of on-the-go purchases at local stores meaning a reduction in sales.
“However, the brand is one of the many looking forward to the reopening of offices and the hospitality sector to increase the sales it makes from the lunchtime trade. It will also be hoping that advice to meet outside may result in some significant picnic purchases of fizzy drinks meaning sunny weather could be reflected in a sunnier outlook for its financials when the time comes to wrap up the year.”