Sales Up at Irn-Bru Maker AG Barr

Soft drinks maker AG Barr has made a strong start to the year with sales up 6.3% despite tough competition and rising material costs.

The manufacturer of the iconic Irn-Bru brand said its performance in the 15 weeks to May 14, 2011 was particularly strong following the 18% growth posted in 2010.

Now based at Cumbernauld, the firm, which also makes Rubicon fruit drinks, said margins are in line with expectations and high input costs are being offset by price increases and cost-cutting efforts.

Barr has also launched its new Irn-Bru summer advertising campaign. It forms part of a £15 million overall investment in marketing which is being spearheaded by a £3 million campaign on television.

An interim management statement covering trading for the period 30 January to date said: "In the period further investment took place to increase brand awareness of Rubicon with successful consumer and trade activity around the cricket world cup.

"In addition, new products, Rubicon Light and KA still fruit drinks, have been launched  into the market – these new additions complement existing ranges and add further depth to  the portfolio.

"The Irn-Bru summer campaign commenced at the start of May both in Scotland and the north of England with TV advertising and a range of point of purchase activities.

"Margins are in line with expectations with continued high levels of input costs, especially in PET and energy, being offset by price increases and further management action to reduce operating costs. Overall raw material inflation remains at previously guided levels.

"The balance sheet remains strong and there have been no significant changes in the financial position of the company since the publication of the report and accounts for the year ending 29 January 2011.

"We have made a strong start to the year despite significantly increased levels of competitor promotion and a continued uncertain consumer environment. We aim to grow our sales and protect our operating margins over the balance of the year, with continued investment in brand development at the same time as we focus on costs and reduce the risk associated with volatile raw materials costs.

"The combination of good sales momentum, stable margins and strong growth plans at this early stage of the year give us confidence that we will continue to deliver good growth in line with our expectations, despite the increasingly competitive marketplace we operate in."

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