AG Barr (LSE:BAG) PLC has reported strong revenue growth in its first half on the return of “on the go” consumption as an easing of lockdown restrictions boosted drink sales.
The maker of Irn-Bru and Rubicon said that revenues for the 27 weeks to August 1 are expected to be £134mln, up 18% year-on-year, adding that its performance had been lifted by “a combination of brand-led initiatives and market factors, some long-term and structural and others more one-off, resulting in a short-term boost to operating margin”.
READ: AG Barr expects full-year profit to exceed 2019/20
While the margin improvement is not expected to be replicated in the second half, the firm said full-year operating margin is still expected to be “slightly ahead of the prior full year”.
Over the period, the company said volumes in its soft drinks division had grown alongside an improving product mix, adding that its “at home” sales had also remained strong with recent product launches performing well.
The group’s energy subcategory was also continuing to outperform the soft drinks market, with the firm saying it plans to increase investment in its Rubicon RAW Energy brand in the second half.
Meanwhile, the firm said trading for its Funkin brand had been “challenging” in the hospitality sector during the pandemic, although it had seen “positive momentum” as consumers returned to hospitality venues which had helped deliver a strong first-half performance.
Looking ahead, AG Barr (LSE:BAG) reiterated its guidance that profit for its current year is expected to be “slightly ahead” of the 2019/20 financial year pre-COVID, where the firm delivered a pre-tax profit of £37.4mln.
The group added that it also plans to recommence dividend payments in the current financial year.
"We are pleased with the performance of the business in the year so far. There is good momentum behind our core brands and we have re-entered the growing big can energy category with our Rubicon RAW Energy range," chief executive Roger White said in a statement.
“We plan to increase our brand investment in the second half of the year, building on our progress to date.
"While uncertainty remains, we are confident in delivering our plans across the balance of the year and meeting our recently revised full-year profit expectations," he added.
AG Barr (LSE:BAG) shares rose 0.9% to 571p in early deals on Tuesday.