IRN-BRU maker AG Barr goes flat

IRN-BRU owner AG Barr (LON: BAG) lost more than one-quarter of its value after its pre-close trading statement. Volumes have been hit as AG Barr tries to improve margins.

Interim revenues are expected to decline 10% to £123m. Even with an improvement in the second half, pre-tax profit is still likely to be one-fifth lower.
Volumes
The soft drinks maker had been focusing on volume rather than margin in the previous financial year, because of the changes in the market, such as the soft drinks industry levy on the more sugary drinks.

Since March the focus has been on pushing up prices in order to improve margins. This has proved difficult and the lack of hot weather in recent weeks has not helped – particularly given the hot summer last year. CO2 shortages have not helped.

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Andrew Hore is the publisher of AIM Journal, which is an online monthly publication covering the Alternative Investment Market.