AG Barr marketing push to boost English sales

City Editor

Friday 22 March 2013

AG Barr plans to launch a television marketing campaign south of the Border by screening its edgy baby-naming advert in northern England where its flagship Irn-Bru soft drink continues to gain in popularity.

AMBER NECTAR: Roger White has big ambitions to increase sales, beginning with a campaign in northern England. Picture: Chris James/Epicscotland

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TIM SHARP CITY EDITOR

The news came as the Cumbernauld-based company revealed it had defied a lacklustre economy and poor weather to post a 4.3% rise in underlying pre-tax profit for last year and said there remained a "compelling rationale" for a proposed tie-up with English rival Britvic.

AG Barr chief executive Roger White said: "In 2013 we will be showing the successful 'Irn-Bru gets you through' campaign in the Nely regions of north-east England, Lancashire and Yorkshire."The first advert to be shown in the coming weeks, which has already been screened in Scotland, features a proud dad visiting his partner and new daughter in hospital – only to be shocked when told what the baby will be called.In the last financial year, 57% of AG Barr's sales came from England and Wales, helped by Irn-Bru's sponsorship of rugby league, while Scotland accounted for 41% and exports the remainder."We remain a strong-performing business in Scotland, growing ahead of the market and hopefully cementing our position with customers," Mr White said. "But our drive to grow our brands in England and Wales is continuing to work well."He added: "Irn-Bru continues to grow steadily and consistently."Overall, year-on-year sales of AG Barr's brands in Scotland were ahead of the market at 4% up, as a 3% fall in sales through the on-trade was offset by a 7% increase in supermarket sales. Impulse purchases, up 3%, still account for the bulk of sales in Scotland at 58%.In England and Wales, sales were up 11.8% as sales grew in all areas, particularly through large retailers.AG Barr now has a 22.3% share of the Scottish carbonated drinks market but still only 2.9% in England and Wales. This, Mr White said, showed the potential for growth south of the Border.AG Barr posted earnings of £35 million for the year to January 26, up from £33.6m for the previous 12 months.Revenues were ahead 6.6% at £237.6m as it added £12.2m to sales of its carbonated drinks and £2.2m to its still drinks.A 20% rise in sugar costs squeezed margins but the company succeeded in pushing up selling prices during the year and said it expected cost increases to be restricted to low single digits in the coming year.Phil Carroll, analyst at Shore Capital, said it had been a robust performance.AG Barr is awaiting approval from the Competition Commission for an all-share merger with Britvic.The company booked £3m of costs relating to the merger during the year but Mr White insisted that expenses due to the Competition Commission inquiry would be minimal."The pound note cost is less than the emotional cost," he said.Mr White, who would become chief executive of the combined Barr Britvic Soft Drinks, said he found the process frustrating but there was a "compelling rationale" for the deal to be given the go-ahead.However, he added: "If it doesn't happen, it is an opportunity lost and no more."The provisional findings are expected in late May.AG Barr expects to finish building work at its new Milton Keynes factory by the summer and begin production shortly after but Mr White said it would not have an impact on the number of employees at its main Cumbernauld base where it currently employs around 400 workers.

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AG Barr marketing push to boost English sales

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