Customers may have kicked up a stink about the reformulation of AG Barr’s Irn-Bru, but the soft drinks maker kept sales bubbling in the first half despite the UK sugar levy and CO2 shortage.

Sales in the six months to 28 July jumped 5.5% to £136.9m driven by notably strong volume growth of 7.2% in the period when many of its sector contemporaries are relying on post-levy price hikes to drive growth.



The group shrugged off “reformulation, weather extremes and CO2 shortages” to post a 4% rise in profit before tax and exceptional items to £18.2m as it grew share on the back of investment in its core brands. It reassured the City it remained on target to hit full-year profit expectations, though it said investment in the second half would have a “moderate” impact on margins.

Analysts at Société Générale said the results confirmed “a strong sequential acceleration in the second quarter after a tough start to the year”.

The broker added: ”That Barr benefitted from others’ supply constraints of CO2 was a useful tailwind… but the breadth of the top line momentum was pleasing nonetheless.”

House broker Shore Capital commented: “Barr has an excellent portfolio of brands with a strong innovation pipeline, an efficient and flexible manufacturing capability as well as net cash on its balance sheet.”

The shares edged down 0.4% to 727p on Tuesday and had fallen further to 721p by Thursday lunchtime on the caution over second half margins, but remain up 13.1% year-on-year.

Elsewhere, Hotel Chocolat reported a double-digit jump in first half sales and pre-tax profits as new store openings and international ventures offset cost increases. Total sales were up 11% to £116.3m for the 52 weeks ending 1 July 2018, as it was buoyed by 15 new store openings which contributed 6% of overall growth. Pre-tax profits rose 13% to £12.7m, while underlying EBITDA increased 16% to £18.9m as the pressure of rising raw material costs was mitigated by “improving productivity and leveraging increased scale”.

The shares ended Tuesday up 1.8% to 343.5p on the better than expected growth, but were back down to 327.5p by Thursday lunchtime - down 3.7% for the week.

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