With Inflation Soaring, The Maker Of Irn-Bru Warns Of Margin Pressure

The British manufacturer of the orange carbonated beverage Irn Bru warned on Tuesday that rising costs and consumers’ reduced spending would hurt its second-half margins.

A.G. Barr imports raw materials like mangoes and aluminum, but CEO Roger White dismissed any immediate or direct effects from the volatile British markets’ depreciating pound.

“We will just see how (the) sterling performs, we are hedged in the short, immediate term, but we replace those hedges on an ongoing basis. We will just have to turn with the market,” White said.

On Monday, the British pound hit a record low against the dollar as investors feared that Britain’s new economic strategy would have a negative impact on its finances.

Numerous businesses issued warnings about the crisis, which is exacerbated by higher commodity and energy prices as a result of the conflict between Russia and Ukraine.

According to White, A.G. Barr increased the prices of its products in February and will keep an eye on its costs throughout the year.

The beverage manufacturer anticipates that ongoing inflationary pressure will influence consumer purchasing habits throughout the year.

As long as costs are under control and sales increase, the company still anticipates an increase in full-year profit.

For the 26 weeks ended July 31, the company reported an adjusted profit before tax of 25.3 million pounds ($27.36 million), up from 20.6 million pounds a year earlier. It also increased its interim dividend by 25 per cent.

(Adapted from Reuters.com)


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