AG Barr, the manufacturer of Irn-Bru, expects revenue to jump year-on-year despite a £10 million revenue impact from supply chain issues.
In an interim trading update for the 26 weeks ended 1 August, the company said income should come in 8% higher at about £246 million, driven by core brand growth and acquisitions.
The company maintained its full-year profit guidance, anticipating double-digit percentage revenue growth in the second half due to market share gains, innovation, and supply chain improvements, with integrations of Fentimans and Frobishers completed and manufacturing investments on track.
“Whilst pleased with our performance in the market in the period, as Q2 progressed, revenue was impacted by reduced stock availability, primarily from internal supply chain issues linked to our capability and capacity change programme, but also by external issues associated with third party manufacturing,” said the company. “The revenue impact of the issues is estimated to be £10m in H1.
“Market share gains, encouraging innovation performance and supply chain actions give confidence of an improved revenue performance in H2.
“As such, the company is anticipating double-digit percentage revenue growth for the full year. The benefits from integration and insourcing actions underpin a strengthening operating margin in H2 and delivery of profit expectations for the full year.”
Euan Sutherland, chief executive, added: “During the first half of the year we made significant progress against our strategic priorities. We completed the integrations of both Frobishers and Fentimans, continued to successfully drive our core brand propositions and made further progress with our manufacturing investment programme.
“Consumer demand for our brands is strong, with all core brands gaining market share. The supply constraints which impacted Q2 performance are being resolved and, with strengthening trading momentum driven by our refreshed core brands and new product development, we remain confident for the full year.”
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