Irn-Bru and Strathmore water owner AG Barr told shareholders the “strategic attraction” of a merger with Britvic had not changed.
The two companies were all set for a £1.4 billion mega merger earlier this year before the Office of Fair Trading stepped in to refer the proposed tie-up to the Competition Commission over concerns about choice in the drinks market.
Investors yesterday gathered for the Cumbernauld firm’s 109th annual meeting and were told the Competition Commission’s provisional findings were expected within days.
They were told the company intended to revisit and likely renegotiate the merger proposal as long as the watchdog did not place a bar on the deal going ahead.
“We continue to cooperate fully with the Competition Commission and, in line with the published timetable, we expect to receive notification of their provisional findings in early June,” Barr’s said in an interim update to the markets.
“The strategic attraction of the merger, as previously described to all shareholders, has not changed and the board will accordingly reconsider the transaction once the Competition Commission findings are available.”
The company said it had seen total revenues increase 2.4% year-on-year in the 15 weeks to May 12.
Barr’s said its performance was ahead of the wider UK drinks market, which was flat in revenue terms in the period, and its capacity was about to increase as a new production facility came online.
“Whilst it is still early in our financial year, our core brands continue to perform well despite the weather, economic challenges and significant increases in competitor promotional activity,” it said.
“Our margins have performed in line with our expectations. We have continued to commit significant marketing investment across all of our core brands, maintaining our strategy of investment in long-term brand building, whilst delivering excellent value for consumers.
“We are making excellent progress with our investment in operating capacity at Milton Keynes. Having taken possession of the site at the beginning of May, installation of plant and machinery is well under way.
“We expect initial commissioning to commence, on schedule, within the next eight weeks,” the firm said.
“Our commercial and operational plans are well developed and we remain focused on delivering a strong result for the year.
The capacity of our balance sheet, together with our strong track record and proven business model, supports the multiple opportunities that exist to develop our business. We remain very confident in our future prospects.”
All resolutions raised at the meeting were duly passed.
Shares rose 4.5p to 574.5p.