AG Barr (LSE:BAG) reported a robust interim performance as its soft drinks and Funkin businesses achieved strong volume growth, and announced that shareholders will receive a 10p special dividend on top of the restarted 2p interim payout.
However, the fizzy drinks maker cautioned that the benefits that boosted the first-half numbers, such as strong sales growth and product launches, are not expected to be repeated in the second half. The company therefore expects the full-year operating margin to be only slightly ahead of the prior year.
The company said it expects full-year profits to be slightly ahead of pre-COVID-2019/20, but cautioned that the lorry driver shortage in the UK has led to increased challenges and impacted customer deliveries in recent weeks.
Pre-tax profits before exceptionals grew 42.8% to GBP23.7mln in the 27 weeks to 1 August.
Revenue increased by 19.5% to GBP135.3mln following strong trading in both business units.
The Barr Soft Drinks unit saw positive momentum across core brands IRN-BRU and Rubicon as “on-the-go” consumption recovered after the lifting of pandemic restrictions, while the performance of new products such as Rubicon RAW Energy was “encouraging”.
In the Funkin business, “at home” cocktail sales grew by 114.3% to GBP10.2mln, representing 54.5% of Funkin’s total sales in the first half of the year.
“AG Barr (LSE:BAG) is a growth-focused business operating in resilient and growing market categories, with dynamic brands, great people and a strong financial position,” said chief executive Roger White.
“Our positive first half performance reflects these fundamentals as well as the encouraging performance of recent innovation launches in both soft drinks and cocktails.”
The company had net cash of GBP65.6mln at the period-end.
Shares were trading 2.78% lower 524p in late morning trade.