Barr upbeat despite slower growth

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Irn-Bru maker AG Barr said sales in the three months to January 30 were up five per cent on last year

Irn-Bru maker AG Barr said disruption caused by the snow and an increasingly competitive market slowed growth in its most recent quarter.

The Cumbernauld-based company, which also makes St Clements, Tizer and Rubicon fruit drinks, said sales in the three months to January 30 were up 5% on last year.

This represents a slowdown on the previous quarter when they increased 6.4% and on the first half of the year when sales were up 14%.

But it still expects like-for-like sales in the financial year to increase by about 10% and said its profit margins will be in line with its expectations despite higher raw material costs.

A bullish trading statement said the performance in the final quarter was “especially pleasing” given comparative sales a year ago, the disruption caused by the snow in December, and the high levels of promotions at retailers. Irn-Bru put in a strong performance in its core market of Scotland and excellent growth in the north of England where the company focused more of its resources.

Sales of Rubicon increased by more than 30% over the past year, breaking through the £50 million mark for the first time, after being boosted by a deal with the England and Wales Cricket Board to sponsor the Friends Provident T20 county competition.

Barr, which has produced Irn-Bru to a secret recipe for more than 130 years, believes its sales will continue to grow despite the difficult economic climate next year because its brands represent value for money.

The company said: “Over the course of the next financial year we expect to see increased pressure on consumers as rising inflation and static household incomes impact purchasing power. Despite this difficult economic environment we anticipate further sales growth opportunities through our core brands which offer a broad choice of high quality excellent value products across an increasing geographic area.”

Shares in Barr rose 2% following the update.

Nicola Mallard, an analyst at Investec Securities, said she expects Barr’s profits to increase by 10% this year in line with its sales, which she described as a strong performance given the high levels of competition in the grocery sector.

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