Irn-Bru maker AG Barr yesterday lifted a glass to its sponsorship of the Glasgow Commonwealth Games as it revealed a 5.4% fizz in half-year turnover during the six months to July 27.
Chief executive Roger White said the firm had benefited from an “excellent” sales drive which saw it act as soft drinks provider to the sporting event.
There was more good news as the Cumbernauld-headquartered firm also revealed a 10-year licence deal to market and distribute the Snapple drinks brand in the UK and other EU territories.
The tea and juice drinks are owned by the US-based company behind Dr Pepper and are hugely popular on the other side of the Atlantic, but have failed to gain market traction in the UK.
Mr White was “very excited” about the new partnership.
The two companies will also work together to identify new markets for the label.
“Snapple is an authentic, high-quality brand that is very successful in the United States, and we strongly believe in the significant potential of Snapple in Europe,” the Barr boss said.
The drinks group, which counts Forfar-based Strathmore water among its stable of brands, said it had experienced market-beating growth across all its categories thanks to innovation and marketing.
Research firm Nielsen said the soft drinks market had grown 0.8% in value terms, weakening over the period.
However, Barr revenues climbed to £135.7 million, while pre-tax profits lifted 24.5% to £16.6m after exceptional costs booked following closure of a manufacturing site at Tredegar in south Wales.
Growth at Strathmore stretched into double digits following improvements in distribution and new innovation.
Early exit from a contract to produce and sell Orangina on behalf of Japanese drinks firm Suntory also generated £600,000 of additional non-recurring income.
Barr said it was particularly pleased with the result, given a tough comparator the previous year. “We have delivered strong, balanced growth across our core brands in the year to date, with volume growth well ahead of the total market,” Mr White said.
“We have traded well across all channels and have benefited from the excellent execution of our Commonwealth Games sales and marketing plans.
“Market conditions across the soft drinks category and general consumer environment are challenging, however we plan to maintain our increased levels of investment in our brands, people and assets across the rest of the year and we remain confident in the long-term potential of the business.”
The Commonwealth effect is likely to continue to be felt in the second half, with the reporting period straddling the games.
However, the company went on to warn of last month’s “subdued period of both weather and resultant market performance”.
Shares slid slightly, closing the day down 1p at 630.50p, despite a 10.1% hike in the interim dividend to 3.11p per share.