AG Barr has issued a profit warning after admitting the poor summer weather had significantly hit the soft drinks market – and warned that clouds remained on the horizon.
The soft drinks company will announce its interim financial results for the past six months on 24 September but today said it expected the conditions, including record levels of rainfall, to have hurt performance.
“As has been widely reported during the course of 2012, the total soft drinks market has seen some marked changes in overall performance – in particular from March onwards, when the market was significantly impacted by adverse weather,” the company said.
It noted that for the 26 weeks to 23 June 2012, the total soft drinks market was down 1% by volume [Nielsen], with carbonates flat and stills down by 3%.
“In recent weeks the weather has been extremely poor, with record levels of rainfall and we expect this will have had a further negative impact on market performance when the data is available for the remainder of June and July,” said Barr.
Nevertheless, the company said it expected to grow ahead of the market, anticipating sales revenue of £130m – an increase of 4.5% year on year.
“Margins in the period have been impacted by increases to cost of goods, increased brand investment and adverse changes to our sales mix at brand, pack and channel level and as a result we expect profits in the first six months to be slightly below the prior year,” it said.
“We anticipate that margins will improve in the second half but that it is unlikely to offset the margin shortfalls of the first half.”
The news comes after soft drinks rival Britvic issued its own gloomy forecast, with sales down 5% for the past three months.