AG Barr warns on profits after recipe changes and bad weather bite

AG Barr on Tuesday warned bad weather and recipe changes to its Rockstar and Rubicon drinks which bombed with customers will dent profits, sending the shares plunging 27%.

The shares lost 236.7p to 632p as the FTSE 250 soft drinks group outlined a raft of problems that hit the business in the six months to July 27.

AG Barr said poor weather, particularly in the north of England and Scotland, hurt sales of cold drinks. But on top of that the firm experienced “brand challenges” with its Rockstar and Rubicon ranges.

The firm put the problems down to pricing competition from rivals, new recipes that were introduced, and a weaker fruit juice market.

Sales will be around £123 million in the first half, compared with £136 million a year earlier when AG Barr benefited from sunshine and promotions to boost sales in the wake of the introduction of the Government’s sugar tax.

AG Barr has taken action to improve performance in the second half, including “recipe improvement activity” for Rubicon and the launch of three Rockstar energy drinks.

But it warned the benefits won’t materialise until later in the year.

Profits for the year to January 2020 may be up to 20% lower than the £45.2 million last year as a result. Some exceptional costs may be incurred.

Boss Roger White said: “We are focused on returning to growth.”