THE Cumbernauld headquarters of AG Barr is being effectively transferred to its pension fund in a £20 million deal to close its funding hole, as a restructuring of the Irn-Bru maker's telesales operation promises to bring 25 more jobs to the town.
A £2m bill amassed dealing with a Competition Commission investigation into AG Barr's attempted takeover of rival Britvic contributed to a 10.4% fall to £13.2m in its first half pre-tax profit.
But on an underlying basis, stripping out the impact of the Britvic bid and other one-off costs, earnings were up 12.3% to £16.6m in the six months to July 28, as warm summer weather helped push up turnover 5.8% to £128.7m.
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Investors reacted cautiously, sending AG Barr's shares down 3p or 0.6% to 522p.
Chief executive Roger White said: "We have made good progress across all fronts."
He said the result had been pleasing given the "significant distraction" of the Britvic takeover attempt.
AG Barr revealed it has agreed to transfer properties worth £21.7m, including its production facility, offices and warehousing in Cumbernauld, to a partnership in which its pension scheme has an interest.
The property is to be leased back to AG Barr over 20 years generating rent of more than £1.1m a year.
AG Barr anticipates a review due next year will identify a £10m pension deficit despite recent favourable moves in financial markets.
It said a conventional deficit recovery plan would have cost it £1.5m a year.
The company will retain operational control of the properties. It will also be able to buy them back at a fixed price at the end of the lease or if the pension scheme becomes fully funded.
The deal follows similar arrangements announced by the likes of whisky maker Diageo which pledged whisky stocks against the funding gap in its pension scheme.
In the six-month period AG Barr booked exceptional costs of £459,000 relating to an upcoming shake-up and centralisation of its telesales operation. This will lead to 25 more posts being based in Cumbernauld.
"There will be more people working in Scotland," Mr White said. But "modest" job losses are expected at sites in England.
AG Barr reported a 5% rise in sales in Scotland which now accounts for 39% of its business.
Meanwhile south of the Border, sales were up 9%, and accounted for 59% of the group's total as it pushed Irn-Bru in northern England.
Mr White said: "The Scottish business is still in growth however it now makes up less than 40% of the total mix. We must continue to invest in our core business in Scotland and develop our market position.
"The brand health of Irn-Bru in Scotland is excellent."
Irn-Bru is in the unusual position of having its average price rise above that of market leader Coca Cola as AG Barr cut back on promotions.
The company has also started to put more marketing muscle behind its Barr soft drinks range, including the screening of its first television adverts in Scotland. Mr White said the Barr brand has "real potential".
AG Barr's sales growth has been helped by the start of production at a new £34m facility at Milton Keynes, north of London.
In the period AG Barr booked £2m of costs in relation to a competition inquiry into its bid for Britvic, the maker of Robinsons squash.
After being given the green light by the competition authorities, AG Barr was unable to agree a new deal with Britvic, whose board had previously backed a merger. Its total bill for the aborted takeover amounted to £4.9m, AG Barr disclosed.
Mr White said: "To see that you put a year's worth of effort into anything and at the end of it you do not manage to achieve what you set out to do, that is a little bit disappointing," he said.
Asked if he regarded Britvic's board as having behaved honourably, he said: "Everybody behaves the way they think is right. We behaved impeccably throughout the process. I am sure Britvic think the same about themselves."
Wayne Brown, analyst at Canaccord Genuity, said: "AG Barr's performance continues to accelerate ahead of the market."
AG Barr declared an interim dividend of 2.825p, up from 2.616p last year, to be paid on October 18.