AG Barr says revenue up but hit by stock availability issues
AG Barr PLC on Tuesday maintained its full-year profit outlook, although it estimated a £10 million hit to first-half revenue due to internal and third-party problems.
Shares in AG Barr were down 7.0% at 600.00 pence on Tuesday afternoon in London.
The Cumbernauld, Scotland-based Irn-Bru and Rubicon owner expects to report approximately £246 million in revenue for the six months ending August 1, representing growth of around 8% from £228.1 million the year before due to "continued core brand growth and the contribution from recent acquisitions".
AG Barr added that its adjusted operating margin for the first half should be in the middle of its guidance range, citing analyst consensus of between 14% and 16%.
AG Barr also said its core brands are performing strongly, with market-beating growth from Irn-Bru in both England and Scotland. Also, its "manufacturing investment programme remains on track and within budget", with the capacity upgrade in Milton Keynes progressing as expected.
However, the soft drinks company added: "Whilst pleased with our performance in the market in the period, as Q2 progressed, revenue was impacted by reduced stock availability, primarily from internal supply chain issues linked to our capability and capacity change programme, but also by external issues associated with third-party manufacturing."
AG Barr expects a revenue impact of around £10 million for the first half.
However, it said it expects double-digit percentage revenue growth for the full year ending January 31, citing gains in market share, supply chain actions and "encouraging innovation performance" which "give confidence of an improved revenue performance in H2." It also expects to meet "profit expectations for the full year".
AG Barr cited analyst consensus for £71.9 million in adjusted pretax profit. It also expects a return on capital employed between 19% and 21%.
For the previous financial year, the firm reported £62.6 million in statutory pretax profit, £437.3 million in revenue, and £65.8 million in adjusted pretax profit. It also declared a 15.27p per share final dividend, which brought the total payout to 18.71p.
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