LIFE is still sweet at Irn-Bru maker AG Barr despite the sugar tax, figures show.
The Cumbernauld company was forced to reformulate the fizzy favourite after the UK Government brought in new rules aimed at curbing consumption of sugary drinks.
The news sparked panic amongst die-hard fans, who stockpiled old formula cans and bottles.
Now the latest results from AG Barr reveal a rise in both sales and pre-tax profits.
Chief executive Roger White said the success had been secured despite a series of obstacles, including the sugar tax – officially known as the Soft Drinks Industry Levy (SDIL) – and the Beast from the East weather front that kept Scots from the shops earlier this year.
Announcing that a 5.5% sales increase had driven underlying pre-tax profits up 4% to £18.2 million for the six months until the end of July, AG Barr told shareholders it had “carefully navigated through a challenging and volatile marketplace”.
As well as the famous ginger, AG Barr brands include the fruit-flavoured Rubicon range, Strathmore water and Funkin cocktail mixers aimed at older consumers.
The profits news represents a drop on the previous year’s performance, when the take was £19.4m.
However, this included £2.5m from the sale of property.
The company commented: “Across the six month reporting period both the soft drinks market, and the wider grocery market, experienced the effect of weather extremes, from the significant snowfall in the first quarter as the ‘Beast from the East’ struck the UK, to the more recent record-breaking hot summer.
“The unusual demand patterns which arose as a result were further compounded by the well-publicised shortage of CO2 in the early summer, affecting soft drinks supply for a number of weeks and heightening overall market volatility.
“Adding the impact of product reformulation and the implementation of the SDIL to this changing landscape makes it extremely difficult to disaggregate the effect of these different dynamics on the market, however we are pleased to report that our growth momentum has not been interrupted.”
Before the recipe change in January, Irn-Bru had 10.3 grammes of sugar per 100ml, but 50% of this was stripped out taking the total down to 4.7g.
A “range of low calorie sweeteners” were added to replicate the traditional taste.
Commenting on the results, AG Barr chief executive Roger White said: “We have delivered a solid financial performance in the first half of the financial year, navigating through the Soft Drinks Industry Levy implementation, reformulation, extremes of weather and CO2 shortages in addition to a dynamic consumer, customer and macro-economic environment.
“Our core brands have performed well and have good momentum with both consumers and trade customers.
“We will continue to ensure our actions and investment decisions support our long term growth strategy. We plan to invest further across the second half of the financial year which we anticipate will have a moderate impact on margins. We remain on target to meet our profit expectations for the full year.”
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