Monday,British soft drinks group A.G.Barr plc (BAG.L) reported higher sales for the four-month period to May 29, driven by "strong" underlying growth and the Rubicon acquisition, and added that overall trading for the year remains in line with its expectations.
In an Interim Management Statement for the February 1 to May 29 period, the company reported that total revenue increased by 22.5% from that reported in the same period of last year. Like-for-like, minus the impact of the acquisition of exotic fruit drinks maker Groupe Rubicon Ltd. in August 2008, rose by 7.9%.
The company has attributed its four-month performance to a combined effect of the strong underlying revenue growth from its core Barr business and the increasingly positive performance from the newly-acquired Rubicon brand business, despite the difficult economic scenario and strong market competition.
The company noted that it has maintained its focus on core brand investment, and its prior investments in sales execution have now started to yield benefits.
Barr's biggest brand is the energy drink IRN-BRU, which is apparently known as Scotland's "other national drink." According to the company, which has been in the soft drinks business since 1875, this popular brand has had sales of over 10 million cans since it was launched in 2006.
Updating on its Rubicon takeover, Barr reported good progress from the accelerated integration process, which began in January this year. The progress has helped offset the impact of the weak Sterling and associated increases in input costs, Barr said, and added that Rubicon remains on track to meet targets set at the time of acquisition.
The company further noted, "Our balance sheet remains strong and there have been no significant changes in the financial position of the company since the publication of the Report & Accounts for the year ended 31 January 2009."
Looking ahead, Barr stated that overall trading remains in line with its expectations, banking on the fact that sales in the latter half of May have benefited from improved weather conditions, but cautioned that the May sales "are up against some strong weather driven comparables from last May."
On May 26, Barr, in its annual general meeting statement, had reported that like-for-like revenue in the first 15 weeks was well ahead of the corresponding period last year, and also said at that time that the integration of the Rubicon business was going according to plan.
At March end, the company had posted higher profit for fiscal 2008, boosted by strong revenue growth mainly on acquisition and an additional one week of operations. Pre-tax profit was up 11.4% at GBP 23.21 million and adjusted pre-tax profit rose 9.7% to GBP 23.4 million from last year.
Annual revenue grew 14.4% to GBP 169.70 million year-over-year, helped by the Rubicon acquisition last year and an additional week compared to prior year's 52-week. Adjusting for the 53rd week and excluding turnover associated with the Rubicon acquisition, like-for-like increase was 6.6%.
BAG.L is currently trading on the LSE at 1,324.00 pence, up 22.00 pence, or 1.69%.
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