Irn-Bru fizzy drink maker AG Barr PLC (LON:BAG) said trading in the financial year to date has been below expectations.
Revenue for the 26 weeks to 27 July 2019 is estimated to be in the region of £123mln, down from £136mln a year earlier.
READ AG Barr loses some fizz as it eyes “more challenging” market in 2019
The company said it expects full-year profits will be down by as much as 20% year-on-year. It cautioned that there will be some exceptional costs incurred in the current financial year as it takes action to regain momentum.
Having focused on volume in 2018 to combat a number of challenges facing the soft drinks industry, such as the sugar tax and shortages of CO2, the company has attempted this year to increase prices, fully aware that this would most likely hit volumes.
The company said the tail-off in sales volumes had been exacerbated by some specific brand problems, particularly with the Rockstar energy and Rubicon juice drinks, as well as disappointing spring and early summer weather, most notably in Scotland and the north of England.
The company said it has taken action to combat the specific brand-related issues but the benefit of these actions will not be felt until later in the year.
On the plus side, the company said it is seeing “positive indications of acceptance of the new price positioning” while the Funkin cocktail mixers business is more than holding its own.
#BAG rather abruptly loses its fizz????Barr(A.G.) PLC: Pre-close trading update
Commiserations to holders here as this is a bit of a shocker from left field ???? https://t.co/AVZm1r6hZq
— Rhomboid1 (@rhomboid1MF) July 16, 2019
"While the Funkin business goes from strength to strength, it has been a challenging start to the year for Barr Soft Drinks,” admitted Roger White, the chief executive officer of AG Barr.
“Weather comparatives and trading, particularly in the impulse on-the-go market, have been even tougher than expected which, along with some brand-specific challenges, have led to a short-term impact on our financial performance. We are focused on returning to growth and will continue to take the actions we believe necessary to succeed in the dynamic environment within which we operate," he added.