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FTSE: Irn Bru maker AG Barr revenue up by 17%

Irn Bru is seen on the shelves of Scotch Corner in Pitlochry, Scotland, Britain May 10, 2018. REUTERS/Russell Cheyne
The makers of Irn Bru say their revenue is up 17%. Photo: Reuters/Russell Cheyne

Irn Bru maker AG Barr posted its interim results reporting strong growth with revenue up by 17%, however, reduced consumer confidence has hit the company's second-half margins.

The Irn-Bru maker said trading was boosted by the warm summer weather and revenue in the first six months to July 31, 2022, fizzed upwards by 17% compared to the same period in 2021.

The company took in £157.9m ($171m) in the first six months of 2022 compared to £135.3m for the first half of the previous year.

The company rewarded its Investors by increasing its dividend payout by 25%, now at 2.50p per share, up from 2.00p.

However, macroeconomic headwinds look set to create testing conditions for the soft drinks manufacturer (BAG.L) with an increase in costs due to inflation and reduced consumer confidence, as the cost of living crisis bites and the pound sinks against the dollar (GBPUSD=X).

In the interim results, AG Barr reported a rise in first-half profit but as a consequence of the inflationary environment, the company took a hit to its second-half margins.

The FTSE (^FTSE) listed company saw its share price fall in early trading in London on Tuesday, with the pice at 496p, down 1.5p, or 0.30%.

As markets opened in London the FTSE 100 (^FTSE) called up 41.34 pints, or 0.59%, now at 7,064.04.

Read more: Pound crashes to all-time low against dollar as Kwarteng signals more tax cuts

The Scottish company is initiating mitigating actions that management hope will still return an improved profit for the full year.

Chief executive officer of A.G. Barr Roger White reflected on the rising inflationary environment within the UK and said: "We anticipate in the coming months that the current economic environment will impact consumer purchasing behaviour, however, we currently remain confident that our strategy and actions will allow us to deliver a full-year profit performance ahead of the prior year."

Read more: Mini-budget: Kwarteng cuts income tax and stamp duty in growth push for UK economy

The wider economic environment in the UK is bleak, with speculation the Bank of England will enact an emergency interest rate rise following yesterday's collapse of sterling against the dollar.

Watch: Pound steadies as markets expect Bank of England action to prop up UK currency