A.G. BARR plc, the soft drinks group, announces a pre-close trading update in respect of the six months to July 25, 2015. Half year sales revenue is expected to be approximately 128 million pounds.
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In the six month period trading has remained subdued as anticipated; the combination of tough prior year comparatives and changes to market promotional phasing, related to company's Glasgow 2014 Commonwealth Games activity, along with poor weather, particularly in the north of the UK, have all had an impact on company's sales performance.
Business Process Redesign project (BPR) and the subsequent transition to a new company wide system platform in early June has, as expected with a project of such scale and complexity, given the company some short term customer service challenges which have also impacted company's overall revenue performance.
Half year sales revenue is expected to be c.£128m which is a drop of c.5% on the prior year. On an ongoing basis, allowing for the impact of the loss of the Orangina brand and the divested Findlays brand, sales declined by c.3.5%.
Market conditions have remained competitive with ongoing deflation across the soft drinks market and continued high levels of price promotion. Despite these challenges company's margins remain in line with management expectations.
The last six months have been a very busy period at A.G. BARR with the closure of company's Tredegar site, commissioning of carton packaging capability at Milton Keynes, the acquisition of Funkin and the go-live of company's BPR project, however all of these actions will lay the foundations for further growth and operational improvement.
Company's objective for the second half of the year is to bring improved operational stability and growth to the business and to begin to realise the benefits associated with the changes we have made.
Company's balance sheet remains strong and company's capital investment plans are in line with management expectations. ■