TIDMBAG
RNS Number : 1372N
Barr(A.G.) PLC
28 September 2021
IMMEDIATE RELEASE 28 September 2021
A.G. BARR p.l.c.
("A.G. BARR" or "the Group")
A.G. BARR produces and markets some of the UK's leading drinks
brands, including IRN-BRU, Rubicon and Funkin.
INTERIM RESULTS FOR THE 27 WEEKSED 1 AUGUST 2021
Strong first half performance and recommencement of
dividends
Financial summary
Aug 2021 July 2020 Change
Revenue GBP135.3m GBP113.2m 19.5%
---------- ---------- --------
Profit before tax (before exceptional
items)* GBP23.7m GBP16.6m 42.8%
---------- ---------- --------
Statutory profit before tax GBP24.4m GBP5.1m 378.4%
---------- ---------- --------
Operating margin before exceptional
items* 17.7% 15.1% 260 bps
---------- ---------- --------
Earnings per share before exceptional
items* 12.15p 10.52p 15.5%
---------- ---------- --------
Net cash flow from operating
activities GBP16.9m GBP24.0m (29.6%)
---------- ---------- --------
Net cash at bank GBP65.6m GBP30.5m 115.1%
---------- ---------- --------
Highlights
-- Strong trading across both business units
o Barr Soft Drinks : Positive momentum across core brands
IRN-BRU and Rubicon, recovery in "on-the-go" consumption, and
encouraging performance from new product launches including Rubicon
RAW Energy
o Funkin : Strong growth in the Funkin brand including 150.1% growth in Funkin's ready to drink cocktails and on-trade momentum supported by some customer restocking
-- Record first half profit reflects positive underlying volume
momentum as well as a number of benefits which will not repeat in
the second half. Full year operating margin expected to be slightly
ahead of the prior full year
-- Strong balance sheet with GBP65.6m of net cash at bank
-- Recommencement of dividends, comprising an interim dividend
of 2.00 pence per share plus a one-off special dividend of 10.00
pence per share
Roger White, Chief Executive, commented:
"AG Barr is a growth-focused business operating in resilient and
growing market categories, with dynamic brands, great people and a
strong financial position.
"Our positive first half performance reflects these fundamentals
as well as the encouraging performance of recent innovation
launches in both soft drinks and cocktails.
"We remain on track to deliver strong full year profit
performance, slightly ahead of our 2019/20 pre-COVID level."
For more information, please contact :
A.G. BARR 0330 390 3900 Instinctif Partners 020 7457 2020
Roger White, Chief Executive Justine Warren
Stuart Lorimer, Finance Director Matthew Smallwood
_____________________________________________________________________________________
Interim statement
We are pleased to report a strong performance in the first half
of our 2021/22 financial year.
For the 27 weeks ended 1 August 2021 the Group delivered revenue
of GBP135.3m, up 19.5% on the prior year. On a like-for-like basis,
excluding the extra week of trading, revenue was GBP128.5m, an
increase of 13.5%.
Statutory profit before tax in the period was GBP24.4m (2020/21
: GBP5.1m). This strong performance reflects positive underlying
volume momentum as well as a number of benefits specific to the
circumstances in the first half of this year. While it is difficult
to be precise, it is estimated that in operating profit terms the
impact of the benefit in the first half, which will not repeat in
the second half, equates to c.GBP5m.
Soft drinks market
The overall measured soft drinks market has once again proven
its resilience. IRI Marketplace data for the 27 weeks to 31 July
2021 records the total UK soft drinks market increasing in value by
8.0% and in volume by 4.0%. Within this, still drinks have
recovered from the prior year's decline, up 9.7% in value terms.
While carbonates volume growth slowed to 1.4% in the period, value
continued to accelerate, growing 6.9%.
As previously commented, the 2020 soft drinks market was
characterised by the migration of out-of-home consumer demand into
the home environment. This position is now reversing as the
hospitality sector and on-the-go channels begin to recover. As a
consequence market share data, skewed by these unusual market
dynamics, is now beginning to return to a more normalised read.
Business performance
Trading has been strong across both our business units, Barr
Soft Drinks and Funkin. This performance has been driven by a
combination of brand-led initiatives and market factors, some
long-term and structural and others more one-off, resulting in an
unusually high profit performance in the first half.
We do not expect to maintain the current level of operating
margin in the second half, reflecting the rephasing of our
increased marketing investment and our anticipation of increased
cost inflation across the balance of the year. We do however
anticipate our full year operating margin to be slightly ahead of
the prior full year.
Operational resilience
We continue to put the safety and wellbeing of our employees and
customers at the heart of our business.
Funkin's exceptional growth in the period has led to some supply
chain challenges. However our operational resilience in Barr Soft
Drinks has been excellent across the first half of the year,
maintaining continuity of production and delivering high levels of
quality and customer service.
In recent weeks we have seen increased challenges across the UK
road haulage fleet, associated in part with the COVID-19 pandemic,
impacting customer deliveries and inbound materials. In addition,
the risks associated with the wider labour pool and the current
COVID-19 pandemic response are areas we continue to monitor
closely.
We believe the commitment and capability of our workforce and
supply base will stand us in good stead in these uncertain
times.
Barr Soft Drinks
Over the past six months we have benefited from recovery in
"on-the-go" consumption, growing volume and improving product mix,
while our "at home" sales have remained strong, as they have done
throughout the COVID-19 pandemic. Recent new product launches are
performing well, with positive consumer feedback and encouraging
customer listings.
As the third lockdown arose, our flexible business planning
approach allowed us to rephase much of our marketing investment
into the second half of the year. Notwithstanding this rephasing,
we ran a full IRN-BRU consumer campaign during Euro 2020, supported
the permanent launch of the premium IRN-BRU 1901 format, and
launched our new IRN-BRU advertising campaign "It Tastes Magic"
across all media platforms. The IRN-BRU brand as a whole has grown
revenue by 18.9%, supported by our marketing activity and the
continuing recovery of on-the-go consumption.
We continue to deliver our Rubicon brand strategy, developing
the brand into an aspirational mainstream range of exciting fruit
based drinks aimed at a broad range of consumers. In the first half
of the year total Rubicon brand sales (excluding Rubicon RAW
Energy) increased by 26.2% with Still, Sparkling and Spring
variants all delivering growth.
The energy sub category continues to outperform the total soft
drinks market. Our renewed focus in this area, with the development
of IRN-BRU Energy and now the launch of Rubicon RAW Energy, is
increasing our share of this important and growing market. We plan
to accelerate our commercial investment in Rubicon RAW Energy
across the balance of the second half to support the development of
this strategically important brand.
Funkin
The response to the COVID-19 pandemic has been especially
challenging for the hospitality sector, however we are pleased to
see positive momentum as consumers return to hospitality venues.
Funkin has delivered a strong first half performance in the
on-trade, with sales in this sector up 229.5%. This has been driven
by both one-off customer restocking and a significant increase in
cocktail rate of sale experienced during the reopening of the
sector.
During the various lockdown periods, Funkin capitalised on the
increase in demand for cocktails at home, through both traditional
retail and direct to consumer channels, becoming the UK's No.1
ready to drink cocktail brand (Source: Nielsen pre-mixed alcoholic
drinks total coverage value sales data MAT 31/07/2021).
Our "at home" cocktail sales have grown by 114.3% to GBP10.2m,
representing 54.5% of Funkin's total sales in the first half of the
year. This significant growth has been supported by a continued
strong rate of sale and an increasing level of brand distribution.
We will accelerate our investment in the second half of the year as
we continue our strategy to develop Funkin as a premium consumer
brand.
Exceptional items
In the period ended 1 August 2021 we have reported pre-tax
exceptional income of GBP0.7m relating to the profit on disposal of
our former Sheffield distribution depot which was closed in early
2019 (the costs of which were recorded as exceptional in 2019/20)
and sold in February of 2021 for GBP1.1m. (2020/21 : Exceptional
charge of GBP11.5m, comprising GBP10m non-cash Strathmore brand and
asset impairment and GBP1.5m cash associated with our business
re-engineering programme).
Cash Flow
Cash flow generated from operations of GBP20.3m was GBP9.8m
lower than the corresponding period in the prior year (2020/21 :
GBP30.1m), driven primarily by month end timing and the impact of
the 27 week period.
Capital expenditure in the first half of the year was GBP1.4m
(2020/21 H1 : GBP2.8m) reflecting the phasing of planned
expenditure. We expect to complete our planned capital expenditure
programme across the balance of the financial year with a full year
estimated expenditure of GBP6-8m (2020/21 : GBP7.1m).
Balance sheet
Our closing net cash at bank* as of 1 August 2021 was GBP65.6m,
a GBP15.6m increase on the 2020/21 year end position. This strong
performance is a consequence of our positive trading, robust
working capital controls, minimal bad debts, appropriate inventory
levels, the temporary suspension of dividends and our modest
capital expenditure.
Throughout the COVID-19 pandemic we maintained a prudent and
proactive approach to cash management with a focus on cash
conservation, the suspension of dividends and capital expenditure
reductions, combined with strong operational controls over working
capital. During the first six months of the financial year we
didn't utilise any Government COVID-19 support and paid our 2020
VAT payments which had been deferred in line with the Government's
COVID-19 response measures. To date our bad debt and overdue
balances remain minimal, despite having extended credit to some
customers and having agreed repayment plans with others who have
been particularly impacted by lockdown restrictions.
Earnings per share before exceptional items* of 12.15p (2020/21:
10.52p) reflects the impact of the Government's planned increase in
corporation tax on our deferred tax rates.
Responsibility
We continue to strive to be a sustainable and responsible
business. Environmental sustainability in particular is a key area
of focus and we remain committed to be net zero by 2040, if not
sooner. Our No Time To Waste environmental sustainability programme
is about setting our environmental sustainability ambitions and
then delivering them, and we are on track to share our science
based targets and our net zero roadmap during the course of
2021.
Board changes
We were pleased to welcome Mark Allen OBE and Zoe Howorth to the
Board in July 2021 as independent Non-Executive Directors. As
previously communicated Mark will succeed John Nicolson as Chairman
when John steps down from the Board prior to the next AGM in May
2022.
As part of her responsibilities, Zoe will Chair the Board's
Environmental, Social and Governance Committee.
Having completed eight years as a Non-Executive Director, Pam
Powell stood down from the Board at the end of June 2021 as part of
the long term Board succession plan. We would like to thank Pam for
her support, insight and guidance during her term on the Board.
Dividend
We previously committed to recommence dividend payments during
the course of the financial year ending January 2022.
Our dividend framework provides for a progressive and
sustainable dividend that takes into account current performance
trends including sales, profit after tax and cash, and satisfies
certain guiding principles :
-- Dividend cover: targeting 2 times earnings cover
-- Payout ratio: targeting 50% of free cash flow
-- Consistent with medium-term profit outlook
Under this framework the Board is recommencing our dividend
distributions with an interim dividend for the 27 weeks ended 1
August 2021 of 2.0 pence per share (2020/21 : nil) payable on 29
October 2021 to shareholders on the register on 8 October 2021.
In addition we are announcing a special dividend of 10.0 pence
per share payable on 29 October 2021 to shareholders on the
register on 8 October 2021. During the period of dividend
suspension the Group benefited from a number of one-off cash
inflows that were outside normal trading. These included the
payment received relating to the termination of the Rockstar
franchise agreement, compensation for the removal of a wind turbine
at our Cumbernauld site and the disposal of certain surplus
property, primarily distribution depots. Following a review of the
Group's current net cash position and our future funding
requirements, the Board concluded that a one-off special dividend
should be distributed to shareholders, recognising the one-off and
non-operating nature of the cash receipts.
Outlook
AG Barr is a growth-focused business operating in resilient and
growing market categories with exciting brands, great people and a
strong financial position.
Our positive first half reflects the underlying strength of the
business alongside the encouraging performance of recent innovation
launches. It also reflects a number of non-recurring factors, in
particular customer restocking, deferred overheads and marketing
investment phasing choices.
Our full year planning takes into account the first half
benefits which will not repeat in the second half as well as the
impact of cost inflation later in the year, reflecting the well
documented pressure on supply chains and rising commodity
prices.
We remain confident in our previously communicated full year
performance expectations, to deliver profit slightly ahead of our
2019/20 pre-COVID-19 levels.
John Nicolson Roger White
Chairman Chief Executive
* Items marked with an asterisk are non-GAAP measures.
Definitions and relevant reconciliations are provided at the end of
this announcement
Consolidated Condensed Income Statement
Unaudited Unaudited Audited
6 months ended 1 August 2021 6 months ended 25 July 2020 Year ended 24 January 2021
================================ ================================ =================================
Before Before Before
exceptional Exceptional exceptional Exceptional exceptional Exceptional
items items* Total items items* Total items items* Total
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------ ----- ----------- ----------- ------ ----------- ----------- ------ ----------- ----------- -------
Revenue 6 135.3 - 135.3 113.2 - 113.2 227.0 - 227.0
Cost of sales (73.8) - (73.8) (64.9) (0.3) (65.2) (132.2) (1.2) (133.4)
------------------- =========== ----------- ====== ----------- =========== ====== ----------- =========== =======
Gross profit 6 61.5 - 61.5 48.3 (0.3) 48.0 94.8 (1.2) 93.6
Other income - 0.7 0.7 - - - - 7.6 7.6
Operating expenses (37.6) - (37.6) (31.2) (11.2) (42.4) (61.2) (13.2) (74.4)
=================== =========== =========== ====== =========== =========== ====== =========== =========== =======
Operating
profit 8 23.9 0.7 24.6 17.1 (11.5) 5.6 33.6 (6.8) 26.8
Finance costs (0.2) - (0.2) (0.4) - (0.4) (0.7) - (0.7)
Share of results of
associate - - - (0.1) - (0.1) (0.1) - (0.1)
=================== =========== =========== ====== =========== =========== ====== =========== =========== =======
Profit
before tax 23.7 0.7 24.4 16.6 (11.5) 5.1 32.8 (6.8) 26.0
Income tax
expense 9 (10.2) - (10.2) (4.9) 1.7 (3.2) (8.0) 1.1 (6.9)
------------ ----- =========== ----------- ====== =========== =========== ====== =========== =========== =======
Profit attributable
to equity holders 13.5 0.7 14.2 11.7 (9.8) 1.9 24.8 (5.7) 19.1
------------------- =========== =========== ====== =========== =========== ====== =========== =========== =======
Earnings per share (p)
============================================= ====== =========== =========== ====== =========== =========== =======
Basic
earnings
per share 10 12.78 1.71 17.18
Diluted
earnings
per share 10 12.71 1.71 17.16
Earnings per
share
before
exceptional
items 10 12.15 10.52 22.31
============ ===== =========== =========== ====== =========== =========== ====== =========== =========== =======
* Refer to Note 8
Consolidated Condensed Statement of Financial Position
Unaudited Unaudited Audited
As at 1 August As at 24 January
2021 As at 25 July 2020 2021
Note GBPm GBPm GBPm
---------------------------- ---- -------------- -------------------- -----------------------------
Non-current assets
Intangible assets 89.8 92.3 90.5
Property, plant and
equipment 93.3 97.0 96.4
Right-of-use assets 2.2 6.4 2.5
Loans and receivables 1.0 - 1.0
Investment in associates 0.8 0.8 0.8
---------------------------- ---- -------------- -------------------- -----------------------------
187.1 196.5 191.2
---------------------------- ---- -------------- -------------------- -----------------------------
Current assets
Inventories 17.8 18.4 19.3
Trade and other receivables 59.7 54.3 37.6
Derivative financial
instruments 12 0.1 0.1 -
Assets classified
as held for sale - 0.4 0.4
Current tax asset - 0.4 0.7
Cash and cash equivalents 65.6 90.4 52.9
---------------------------- ---- -------------- -------------------- -----------------------------
143.2 164.0 110.9
---------------------------- ---- -------------- -------------------- -----------------------------
Total assets 330.3 360.5 302.1
---------------------------- ---- -------------- -------------------- -----------------------------
Current liabilities
Loans and other borrowings 13 - 59.9 2.9
Trade and other payables 56.5 59.5 43.4
Derivative financial
instruments 12 0.2 0.1 0.1
Lease liabilities 13 1.0 3.0 1.1
Provisions 1.4 0.3 1.9
Current tax liabilities 0.2 - -
---------------------------- ---- -------------- -------------------- -----------------------------
59.3 122.8 49.4
---------------------------- ---- -------------- -------------------- -----------------------------
Non-current liabilities
Deferred tax liabilities 18.9 14.5 14.6
Lease liabilities 13 1.1 3.6 1.4
Retirement benefit
obligations 14 4.8 9.7 7.9
---------------------------- ---- -------------- -------------------- -----------------------------
24.8 27.8 23.9
---------------------------- ---- -------------- -------------------- -----------------------------
Capital and reserves attributable to equity holders
Share capital 4.7 4.7 4.7
Share premium account 0.9 0.9 0.9
Share options reserve 1.1 1.3 1.8
Other reserves 0.1 - (0.2)
Retained earnings 239.4 203.0 221.6
---------------------------- ---- -------------- -------------------- -----------------------------
246.2 209.9 228.8
---------------------------- ---- -------------- -------------------- -----------------------------
Total equity and
liabilities 330.3 360.5 302.1
---------------------------- ---- -------------- -------------------- -----------------------------
Consolidated Condensed Statement of Comprehensive Income
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended 24
1 August 2021 25 July 2020 January 2021
GBPm GBPm GBPm
===================================== ============== ============== =============
Profit for the period 14.2 1.9 19.1
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurements on defined benefit
pension plans (Note 14) 1.5 (0.8) 0.6
Deferred tax movements on items
above (0.4) 0.2 (0.1)
Deferred tax remeasurement
for movement in tax rate 1.5 0.5 0.5
Items that will be or have been reclassified to profit or loss
Cash flow hedges:
Gains arising during the period (0.1) - -
Deferred tax movements on items
above - - -
===================================== ============== ============== =============
Other comprehensive income/(expense)
for the period, net of tax 2.5 (0.1) 1.0
Total comprehensive income
attributable to equity holders
of the parent 16.7 1.8 20.1
------------------------------------- -------------- -------------- -------------
Consolidated Condensed Statement of Changes in Equity (Unaudited)
Share premium Share options
Share capital account reserve Other reserves Retained earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm
=================== ============= =================== =================== ============== ================= =====
At 24 January 2021 4.7 0.9 1.8 (0.2) 221.6 228.8
Profit for the
period - - - - 14.2 14.2
Other comprehensive
(expense)/income - - - (0.1) 2.6 2.5
------------------- ------------- ------------------- ------------------- -------------- ----------------- -----
Total comprehensive
(expense)/income
for the period - - - (0.1) 16.8 16.7
Company shares
purchased for use
by employee
benefit trusts
(Note 15) - - - - (0.1) (0.1)
Recognition of
share-based
payment costs - - 0.4 - - 0.4
Transfer of reserve
on share award - - (1.5) - 1.5 -
Deferred tax on
items taken
directly to
reserves - - 0.4 - - 0.4
Reallocation
between reserves - - - 0.4 (0.4) -
At 1 August 2021 4.7 0.9 1.1 0.1 239.4 246.2
------------------- ------------- ------------------- ------------------- -------------- ----------------- -----
Consolidated Condensed Statement of Changes in Equity (Unaudited)
At 25 January 2020 4.7 0.9 1.4 - 201.3 208.3
Profit for the
period - - - - 1.9 1.9
Other comprehensive
expense - - - - (0.1) (0.1)
------------------- ------------- ------------------- ------------------- -------------- ----------------- -----
Total comprehensive
income for the
period - - - - 1.8 1.8
Company shares
purchased for use
by employee
benefit trusts
(Note 15) - - - - (0.1) (0.1)
Recognition of
share-based
payment costs - - (0.1) - - (0.1)
------------------- ------------- ------------------- ------------------- -------------- ----------------- -----
At 25 July 2020 4.7 0.9 1.3 - 203.0 209.9
------------------- ------------- ------------------- ------------------- -------------- ----------------- -----
Consolidated Condensed Statement of Changes in Equity (Audited)
Share Share premium Share options Retained
capital account reserve Other reserves earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm
=========================== ======== ============= ============= ============== ========= =====
At 25 January 2020 4.7 0.9 1.4 - 201.3 208.3
Profit for the year - - - - 19.1 19.1
Other comprehensive
income - - - - 1.0 1.0
--------------------------- -------- ------------- ------------- -------------- --------- -----
Total comprehensive
income for the year - - - - 20.1 20.1
Company shares purchased
for use by employee
benefit trusts (Note
15) - - - - (0.1) (0.1)
Recognition of share-based
payment costs - - 0.7 - - 0.7
Transfer of reserve
on share award - - (0.1) - 0.1 -
Deferred tax on items
taken direct to reserves - - (0.2) - - (0.2)
Reallocation between
reserves - - - (0.2) 0.2 -
--------------------------- -------- ------------- ------------- -------------- --------- -----
At 24 January 2021 4.7 0.9 1.8 (0.2) 221.6 228.8
--------------------------- -------- ------------- ------------- -------------- --------- -----
Consolidated Condensed Cash
Flow Statement
Unaudited Unaudited Audited
6 months ended 1 August 2021 6 months ended 25 July 2020 Year ended 24 January 2021
GBPm GBPm GBPm
=============================== ============================ =========================== ==========================
Operating activities
Profit for the period before
tax 24.4 5.1 26.0
Adjustments for:
Interest payable 0.2 0.4 0.7
Depreciation of property, plant
and equipment 5.2 5.4 11.8
Amortisation of intangible
assets 0.7 0.6 1.1
Share-based payment costs 0.4 (0.1) 0.7
Gain on sale of fixed assets (0.7) - -
Share of results of associates - 0.1 0.1
Impairment of Strathmore brand - 7.0 7.0
Impairment of Strathmore
goodwill - 1.9 1.9
Impairment of Strathmore
property, plant and equipment - 1.1 1.1
Funkin goodwill adjustment - - 1.3
=============================== ============================ =========================== ==========================
Operating cash flows before
movements in working capital 30.2 21.5 51.7
Decrease/(increase) in
inventories 1.5 (0.1) (1.2)
(Increase)/decrease in
receivables (22.1) 2.9 19.8
Increase/(decrease) in payables 12.4 7.5 (7.1)
Difference between employer
pension contributions and
amounts recognised in the
income statement (1.7) (1.7) (2.2)
------------------------------- ---------------------------- --------------------------- --------------------------
Cash generated by operations 20.3 30.1 61.0
Tax paid (3.4) (6.1) (10.3)
------------------------------- ---------------------------- --------------------------- --------------------------
Net cash from operating
activities 16.9 24.0 50.7
Investing activities
Loan to associate - - (1.0)
Purchase of property, plant and
equipment (1.4) (2.8) (7.1)
Proceeds on sale of property,
plant and equipment 1.1 - 0.1
Net cash used in investing
activities (0.3) (2.8) (8.0)
Financing activities
New loans received - 60.0 60.0
Loans repaid - - (60.0)
Lease payments (0.8) (1.6) (3.2)
Purchase of Company shares by
employee benefit trusts (0.1) (0.1) (0.1)
Interest paid (0.1) - (0.3)
------------------------------- ============================ --------------------------- --------------------------
Net cash used in financing
activities (1.0) 58.3 (3.6)
Net increase in cash and cash
equivalents 15.6 79.5 39.1
------------------------------- ---------------------------- --------------------------- --------------------------
Cash and cash equivalents at
beginning of period 50.0 10.9 10.9
=============================== ============================ =========================== ==========================
Cash and cash equivalents at
end of period 65.6 90.4 50.0
------------------------------- ---------------------------- --------------------------- --------------------------
Notes to the Consolidated Condensed Financial Statements
1 General information
A.G. BARR p.l.c. (the "Company") and its subsidiaries (together the "Group") manufacture,
market, distribute and sell soft drinks and cocktail solutions. The Group has manufacturing
sites in the UK and sells mainly to customers in the UK with some international sales.
The Company is a public limited company, which is listed on the London Stock Exchange and
incorporated and domiciled in Scotland. The address of its registered office is Westfield
House, 4 Mollins Road, Cumbernauld, G68 9HD.
This consolidated condensed interim financial information does not comprise statutory accounts
within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year
ended 24 January 2021 were approved by the Board of directors on 30 March 2021 and delivered
to the Registrar of Companies. The comparative figures for the financial year ended 24 January
2021 are an extract of the Company's statutory accounts for that year. The report of the auditor
on those accounts was unqualified, did not contain an emphasis of matter paragraph and did
not contain any statement under section 498 (2) or (3) of the Companies Act 2006.
This consolidated condensed interim financial information is unaudited but has been reviewed
by the Company's Auditor.
2 Basis of preparation
This consolidated condensed interim financial information for the 27 weeks ended 1 August
2021 has been prepared in accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and the International Financial Reporting
Standards (IFRSs) adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European
Union. The consolidated condensed interim financial information should be read in conjunction
with the annual financial statements for the year ended 24 January 2021, which have been prepared
in accordance with IFRSs as adopted by the European Union.
Going concern basis
The directors have adopted the going concern basis in preparing these accounts after assessing
the principal risks, and having considered the current status of the COVID-19 pandemic and
associated restrictions. This assessment was undertaken through modelling a number of severe
but plausible downside scenarios that could impact the business (both individually and cumulatively)
over the period until January 2024. These scenarios included:-
- A continuation of the COVID-19 pandemic and restrictions imposed for a further 12 months,
and a consequent channel shift and reduction in consumer demand.
- A reduction in sales due to significant adverse damage to one of the Group's principal brands
(e.g. IRN-BRU) sustained over the duration of the viability period.
- Significant changes in consumer preferences and governmental impact in relation to sugar,
plastics and the introduction of a Deposit Return Scheme, specifically in Scotland.
- Financial impact from a significant supply chain disruption (e.g. material supply, factory
closure).
Our experience to date through the pandemic gives us confidence that our operations will remain
open and that the Group can remain profitable and cash-generative through prolonged pandemic
restrictions. The most significant potential financial impact would be due to a significant
reduction in sales. The revenue and operational leverage impact of such a volume loss would
have a negative impact on Group profitability, however the scenario modelling would indicate
that the Group would remain profitable over the next 12 months and we would anticipate a recovery
in the following years.
The Group has GBP50m of committed and unutilised debt facilities, consisting of three revolving
credit facilities with three individual banks, providing the business with a secure funding
platform. Of these facilities, GBP20m expires within the going concern period in February
2022, a further GBP10m expires in April 2023 and the final GBP20m expires in February 2025.
Throughout these severe but plausible downside scenarios, the Group continues to have significant
liquidity headroom on existing facilities and against the revolving credit facilities financial
covenants.
The directors have formed a judgement that there is a reasonable expectation the Group will
have adequate resources to continue in operational existence for the foreseeable future. Furthermore,
the directors believe that the funding options available to the Group provide a level of liquidity
and flexibility that will allow continued investment in the business to support our long-term
growth prospects.
3 Accounting policies
New standards and interpretations applied for the first time
In the current year, the Group adopted Interest Rate Benchmark Reform - Phase 2 (Amendments
to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) as issued by the IASB. The adoption has not
had a material impact on the interim Consolidated Financial Statements. Apart from this change,
the accounting policies set out in the annual financial statements for the year ended 24 January
2021 have been applied consistently to both periods presented in these Consolidated Financial
Statements.
New standards and interpretations not yet applied
There were no new or revised IFRS, amendments or interpretations in issue but not yet effective
that are potentially material for the Group and which have not yet been applied.
4 Principal risks and uncertainties
The directors consider that the principal risks and uncertainties which
could have a material impact on the Group's performance in the balance
of the financial year remain the same as those stated on pages 46 -
50 of the Group's annual financial statements as at 24 January 2021,
which are available on our website, www.agbarr.co.uk, with the exception
of Environmental Social Governance (ESG) risk, which was added as a
new principal risk during the first half of the financial year detailed
below.
Risk Impact Controls and mitigating actions
Environmental The increased focus from all The Group maintains accreditation
Social Governance stakeholders (including Governments, to ISO 14001 and has established
(ESG) Risk customers, consumers, competitors, the No Time To Waste environmental
employees, investors) on ESG sustainability programme with
matters, in particular environmental targets set for CO2 and water
sustainability, means there reduction. There is a focus
is an increased risk of A.G. on employees' health, safety
Barr's ESG performance and/or and wellbeing supported by
commitments being perceived responsible policies and practices.
as poor or inadequate, leading There are good governance
to lost revenue, an erosion structures already in place.
of the employer brand and an
impact on the share price.
The principal risks are summarised below:
- Changes in consumer preferences, perception or purchasing behaviour
- Consumer rejection of enhanced sweeteners used in reformulated products
- Loss of product integrity
- Loss of continuity of supply of major raw materials
- Adverse publicity in relation to the soft drinks industry, the Group
or its brands
- Government intervention on climate change and environmental issues
e.g. packaging waste
- Failure to maintain customer relationships or take account of changing
market dynamics
- Inability to protect the Group's intellectual property rights
- Failure of the Group's operational infrastructure
- Failure of critical IT systems or a breach of cyber security
- Financial risks
- Environmental Social and Governance (ESG) risk
The Group has reviewed its exposure to climate-related and other emerging
business risks but has not identified any specific risks that would
impact the financial performance or position of the Group at 1 August
2021.
5 Financial risk management and financial instruments
The Group's activities expose it to a variety of financial risks: market
risk (including foreign exchange risk, cash flow and fair value interest
rate risk and price risk), credit risk and liquidity risk.
The condensed interim financial statements should be read in conjunction
with the Group's annual financial statements as at 24 January 2021
as they do not include all financial risk management information and
disclosures contained within the annual financial statements. There
have been no changes in the risk management policies since the year
end.
6 Segment reporting
The Executive Committee has been identified as the chief operating
decision-maker. The Executive Committee reviews the Group's internal
reporting in order to assess performance and allocate resources. The
Executive Committee has determined the operating segments based on
these reports.
The Executive Committee considers the business from a product perspective.
This has led to the operating segments identified in the table below.
There has been no change to the segments during the period.
The performance of the operating segments is assessed by reference
to their gross profit.
Unaudited
6 months ended 1 August 2021
Still drinks and
Carbonates & other water Funkin Total
GBPm GBPm GBPm GBPm
------------------- ------------------------ --------------------- ------- ------
Total revenue 100.7 15.9 18.7 135.3
Gross profit 50.4 3.8 7.3 61.5
---------------------- ------------------------ --------------------- ------- ======
Unaudited
6 months ended 25 July 2020
Still drinks and
Carbonates & other water Funkin Total
GBPm GBPm GBPm GBPm
------------------- ------------------------ --------------------- ------- ------
Total revenue 92.7 13.0 7.5 113.2
Gross profit 42.7 2.9 2.7 48.3
---------------------- ------------------------ --------------------- ------- ======
Audited
Year ended 24 January 2021
Still drinks and
Carbonates & other water Funkin Total
GBPm GBPm GBPm GBPm
------------------- ------------------------ --------------------- ------- ------
Total revenue 184.3 25.7 17.0 227.0
Gross profit 82.6 6.1 6.1 94.8
---------------------- ------------------------ --------------------- ------- ------
There are no material intersegment sales. All revenue is in relation
to product sales, which is recognised at point in time, upon delivery
to the customer.
"Carbonates & other" segment represent income from the sale of carbonates
and other soft drink related items.
The gross profit from the segment reporting is stated before exceptional
costs.
The gross profit before exceptional items from the segment reporting
is reconciled to the total profit before income tax as shown in the
consolidated condensed income statement.
All of the assets and liabilities of the Group are managed by the Executive
Committee on a central basis rather than at a segment level. As a result
no reconciliations of segment assets and liabilities to the consolidated
condensed statement of financial position has been disclosed for any
of the periods presented.
Revenue for the 6 months ended 25 July 2020 has been restated to ensure
alcohol duty is accurately reflected within the Funkin segment only.
Revenue in this period for the Funkin segment has increased by GBP1.0m
(Carbonates & other reduced GBP0.9m, Still drinks and water reduced
GBP0.1m). Total revenue and Gross profit is unchanged.
Included in revenues arising from Carbonates & other, Still drinks
and water and Funkin are revenues of approximately GBP28m which arose
from sales to the Group's largest customer. In the year ended 24 January
2021 and six months ended 25 July 2020, revenues of approximately GBP45.6m
and GBP23m respectively arose from sales to the Group's largest customer.
No other single customers contributed 10 per cent or more to the Group's
revenue in the comparative period to July 2020 or January 2021.
All of the segments included within "Carbonates & other" and "Still
drinks and water" meet the aggregation criteria set out in IFRS 8 Operating
Segments.
7 Seasonality of operations
Revenues and reported profits are affected by weather conditions, the
timing of marketing investment and innovation launches, cost inflation,
and in recent periods by the timing of restrictions due to the COVID-19
pandemic. It is anticipated that the reported profits for the second
half of the year to 30 January 2022 will be lower than those for the
27 weeks ended 1 August 2021.
8 Operating profit
The following items have been charged/(credited) to operating profit
during the period:
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended 24
1 August 2021 25 July 2020 January 2021
GBPm GBPm GBPm
------------------------------------ --------------- -------------- -------------
Gain on sale of property (0.7) - -
Impairment of inventories 0.1 0.1 0.2
Impairment of Strathmore brand - 7.0 7.0
Impairment of Strathmore goodwill - 1.9 1.9
Funkin goodwill adjustment - - 1.3
Impairment of Strathmore property,
plant and equipment - 1.1 1.1
Foreign exchange gains recognised (0.2) (0.2) (0.2)
--------------------------------------- --------------- -------------- -------------
Inventories are stated at the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary
course of business less the estimated costs of completing production
and selling expenses.
The items discussed below have been classified as exceptional. The Group
identifies items as exceptional where the nature or scale of the items
requires to be separately presented in order to better understand trading
performance.
The items that have been included in exceptional items have been analysed
in the table below:
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended 24
1 August 2021 25 July 2020 January 2021
GBPm GBPm GBPm
------------------------------------ --------------- -------------- -------------
Gain on sale of property (0.7) - -
Impairment of Strathmore brand - 7.0 7.0
Impairment of Strathmore goodwill - 1.9 1.9
Impairment of Strathmore property,
plant and equipment - 1.1 1.1
Funkin goodwill adjustment - - 1.3
Redundancy costs for business
reorganisation and restructure - 1.5 3.1
Rockstar compensation - - (7.6)
======================================= =============== ============== =============
Net exceptional (income)/charge (0.7) 11.5 6.8
--------------------------------------- --------------- -------------- -------------
During the six months ended 1 August 2021 a gain on sale was made on
the disposal of the Sheffield distribution depot. This asset was classified
as an asset held for sale as at 24 January 2021 and the sale was completed
in February 2021. Management believe that this requires to be separately
presented from trading performance as the costs associated with the
site closure were previously disclosed within exceptional costs.
During the six months ended 25 July 2020 costs of GBP1.5m were incurred
relating to the ongoing change programme within the business which commenced
in the year to 25 January 2020, together with the GBP10.0m impairment
of the Strathmore Water business operations, brought about due to the
hospitality sector being significantly challenged by the lockdown measures
In the second half of the year ended 24 January 2021, further costs
of GBP1.6m were incurred in relation to the above change programme.
This programme is now complete. The termination of the Rockstar franchise
entitled the Group to a one-off contractual termination payment of GBP7.6m,
and there was a GBP1.3m non-cash charge to the income statement relating
to the Funkin acquisition goodwill.
Due to their nature management believes that these items are required
to be separately presented in trading performance so as not to mislead
the users of the financial statements.
9 Tax on profit
The total tax charge is GBP10.2m (six months ended 25 July 2020: GBP3.2m;
year ended 24 January 2021: GBP6.9m) which equates to an effective tax
rate of 41.8% (six months ended 25 July 2020: 62.7%; year ended 24 January
2021: 26.8%). The effective tax rate in the current year has increased
as a result of the remeasurement of deferred tax balances. In March
2021, the UK government announced that the corporation tax rate would
increase from 19% to 25% effective from 1 April 2023 which was substantively
enacted on 24 May 2021. The impact of this was a one-off increase in
the deferred tax charge of GBP5.7m. Excluding the impact of the change
in tax rate the effective tax rate for the six months ended 1 August
2021 was 17.6%.
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended 24
1 August 2021 25 July 2020 January 2021
Analysis of tax charge GBPm GBPm GBPm
------------------------------------ --------------- -------------- -------------
Current income tax charge 4.4 2.6 6.7
Deferred income tax charge 5.8 0.6 0.2
======================================= =============== ============== =============
Total tax charge in the condensed
income statement 10.2 3.2 6.9
--------------------------------------- --------------- -------------- -------------
10 Earnings per share
Basic earnings per share has been calculated by dividing the earnings attributable to equity
holders of the parent by the weighted average number of shares in issue during the year, excluding
shares held by the employee share scheme trusts.
Unaudited Unaudited Audited
6 months ended 1 August
2021 6 months ended 25 July 2020 Year ended 24 January 2021
=========================== =========================== =========================== ==========================
Profit attributable to equity
holders of the Company (GBPm) 14.2 1.9 19.1
Weighted average number of
ordinary shares in issue 111,104,168 111,175,040 111,171,047
------------------------------- --------------------------- --------------------------- --------------------------
Basic earnings per share
(pence) 12.78 1.71 17.18
------------------------------- --------------------------- --------------------------- --------------------------
For diluted earnings per share, the weighted average number of ordinary shares in issue is
adjusted to assume conversion of all potentially dilutive ordinary shares. These represent
share options granted to employees where the exercise price is less than the average market
price of the Company's ordinary shares during the period. The number of shares calculated
as above is compared with the number of shares that would have been issued assuming the exercise
of the share options.
Unaudited Unaudited Audited
6 months ended 1 August
2021 6 months ended 25 July 2020 Year ended 24 January 2021
=========================== =========================== =========================== ==========================
Profit attributable to equity
holders of the Company (GBPm) 14.2 1.9 19.1
Weighted average number of
ordinary shares in issue 111,104,168 111,175,040 111,171,047
Adjustment for dilutive effect
of share options 633,701 - 140,959
------------------------------- --------------------------- --------------------------- --------------------------
Diluted weighted average number
of ordinary shares in issue 111,737,869 111,175,040 111,312,006
------------------------------- --------------------------- --------------------------- --------------------------
Diluted earnings per share
(pence) 12.71 1.71 17.16
------------------------------- --------------------------- --------------------------- --------------------------
The adjusted EPS figure is calculated by using profit attributable to equity holders before
exceptional items:
Unaudited Unaudited Audited
6 months ended 1 August
2021 6 months ended 25 July 2020 Year ended 24 January 2021
=========================== =========================== =========================== ==========================
Profit attributable to equity
holders of the Company before
exceptional items (GBPm) 13.5 11.7 24.8
Weighted average number of
ordinary shares in issue 111,104,168 111,175,040 111,171,047
------------------------------- --------------------------- --------------------------- --------------------------
Earnings per share before
exceptional items (pence) 12.15 10.52 22.31
------------------------------- --------------------------- --------------------------- --------------------------
This measure has been included in the financial statements as it provides a closer guide to
the underlying financial performance as the calculation excludes the effect of exceptional
items.
11 Dividends
An interim dividend of 2.0p per share was approved by the Board on
28 September 2021 and will be paid on 29 October 2021 to shareholders
on the register as at 8 October 2021.
In addition, following a review of the Group's net cash position and
future funding requirements, the Board approved a special dividend
of 10.0p per share recognising the benefit from a number of one-off
cash inflows that were outside normal trading. This dividend will
be paid on 29 October 2021 to shareholders on the register as at 8
October 2021.
In April 2020, given the unprecedented circumstances arising from
COVID-19, we communicated our decision to temporarily suspend dividend
payments, one of a number of important actions we took to conserve
cash and maintain balance sheet flexibility. As a result no dividends
were paid or declared in the six months to 1 August 2021, year to
24 January 2021 or the six months to 25 July 2020.
12 Financial instruments
Current assets of GBP0.1m (at 25 July 2020: GBP0.1m; 24 January 2021: GBPnil) relate to forward
foreign currency contracts with a maturity of less than 12 months and are recognised at fair
value through the cash flow hedge reserve, included within other reserves.
Current liabilities of GBP0.2m (at 25 July 2020: GBP0.1m; 24 January 2021: GBP0.1m) relate
to forward foreign currency contracts with a maturity of less than 12 months and are recognised
at fair value through the cash flow hedge reserve, included within other reserves.
Fair value hierarchy
Fair value hierarchies 1 to 3 are based on the degree to which fair value is observable:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data
The fair value of financial instruments that are not traded in an active market (for example,
over-the-counter derivatives) is determined by using valuation techniques. These valuation
techniques maximise the use of observable market data where it is available and rely as little
as possible on entity specific estimates. The fair value of the forward foreign exchange contracts
is determined using forward exchange rates at the date of the consolidated condensed statement
of financial position, with the resulting value discounted accordingly as relevant.
All financial instruments carried at fair value are Level 2.
Fair values of financial assets and financial liabilities
The following table shows the carrying amounts and fair values of financial assets and financial
liabilities. It does not include fair value information for financial assets and financial
liabilities not measured at fair value if the carrying amount is a reasonable approximation
of fair value.
Carrying amount
==================== ---------------------------------------------------------------------------------------
Other financial
Fair value - Other financial assets at amortised liabilities at
Unaudited hedging instruments cost amortised cost Total
As at 1 August 2021 GBPm GBPm GBPm GBPm
-------------------- ------------------- --------------------------------------- ------------------ -----
Financial assets - Non-current
Loan receivable from
associate - 1.0 - 1.0
------------------------ ------------------- --------------------------------------- ------------------ -----
Financial assets - Current
Foreign exchange
contracts used for
hedging 0.1 - - 0.1
Trade receivables - 56.9 - 56.9
Cash and cash
equivalents - 65.6 - 65.6
------------------------ ------------------- --------------------------------------- ------------------ -----
0.1 122.5 - 122.6
------------------------ ------------------- --------------------------------------- ------------------ -----
Financial liabilities
Foreign exchange
contracts used for
hedging 0.2 - - 0.2
Lease liabilities - - 2.1 2.1
Trade payables - - 13.3 13.3
------------------------ ------------------- --------------------------------------- ------------------ -----
0.2 - 15.4 15.6
------------------------ ------------------- --------------------------------------- ------------------ -----
Carrying amount
==================== --------------------------------------------------------------------------------
Other financial Other financial
Fair value - assets at amortised liabilities at
Unaudited hedging instruments cost amortised cost Total
As at 25 July 2020 GBPm GBPm GBPm GBPm
-------------------- ------------------- ------------------- ------------------ ------------------
Financial assets
Foreign exchange
contracts used for
hedging 0.1 - - 0.1
Trade receivables - 51.7 - 51.7
Cash and cash
equivalents - 90.4 - 90.4
------------------------ ------------------- ------------------- ------------------ ------------------
0.1 142.1 - 142.2
------------------------ ------------------- ------------------- ------------------ ------------------
Financial liabilities
Foreign exchange
contracts used for
hedging 0.1 - - 0.1
Lease liabilities - - 6.6 6.6
Unsecured bank
borrowings - - 59.9 59.9
Trade payables - - 19.5 19.5
------------------------ ------------------- ------------------- ------------------ ------------------
0.1 - 86.0 86.1
------------------------ ------------------- ------------------- ------------------ ------------------
Carrying amount
==================== --------------------------------------------------------------------------------
Other financial Other financial
Fair value - assets at amortised liabilities at
Audited hedging instruments cost amortised cost Total
As at 24 January
2021 GBPm GBPm GBPm GBPm
-------------------- ------------------- ------------------- ------------------ ------------------
Financial assets - Non-current
Loan receivable from
associate - 1.0 - 1.0
------------------------ ------------------- ------------------- ------------------ ------------------
Financial assets - Current
Trade receivables - 35.6 - 35.6
Cash and cash
equivalents - 52.9 - 52.9
------------------------ ------------------- ------------------- ------------------ ------------------
- 88.5 - 88.5
------------------------ ------------------- ------------------- ------------------ ------------------
Financial liabilities
Bank borrowings - - 2.9 2.9
Foreign exchange
contracts used for
hedging 0.1 - - 0.1
Lease liabilities - - 2.5 2.5
Trade payables - - 7.3 7.3
------------------------ ------------------- ------------------- ------------------ ------------------
0.1 - 12.7 12.8
------------------------ ------------------- ------------------- ------------------ ------------------
13 Loans and other borrowings
Movements in borrowings are analysed as follows:
Unaudited Unaudited Audited
Year ended 24
6 months ended 1 August 2021 6 months ended 25 July 2020 January 2021
GBPm GBPm GBPm
------------------------------------ ---------------------------- --------------------------- ----------------
Opening borrowings balance 5.4 7.9 7.9
Net lease payments (0.4) (1.3) (5.4)
Borrowings made - 60.0 60.0
Repayments of borrowings - - (60.0)
Amortisation of loan arrangement fee - (0.1) -
Bank overdraft (repaid)/utilised (2.9) - 2.9
---------------------------------------- ---------------------------- --------------------------- ----------------
Closing borrowings balance 2.1 66.5 5.4
---------------------------------------- ---------------------------- --------------------------- ----------------
The reconciliation of the above closing borrowings balance to the figures
on the face of the consolidated condensed statement of financial position
is as follows:
Unaudited Unaudited Audited
As at 24 January
As at 1 August 2021 As at 25 July 2020 2021
GBPm GBPm GBPm
------------------------------------ ---------------------------- --------------------------- ----------------
Overdraft - - 2.9
Closing loan balance - 59.9 -
Lease liabilities 2.1 6.6 2.5
---------------------------------------- ---------------------------- --------------------------- ----------------
Total borrowings and loans 2.1 66.5 5.4
---------------------------------------- ---------------------------- --------------------------- ----------------
Disclosed as
Current liabilities 1.0 62.9 4.0
Non-current liabilities 1.1 3.6 1.4
======================================== ============================ =========================== ================
The reconciliation to net debt is as follows:
Unaudited Unaudited Audited
As at 24 January
As at 1 August 2021 As at 25 July 2020 2021
GBPm GBPm GBPm
==================================== ---------------------------- --------------------------- ----------------
Closing borrowings balance (2.1) (66.5) (5.4)
Cash and cash equivalents 65.6 90.4 52.9
---------------------------------------- ---------------------------- --------------------------- ----------------
Net funds 63.5 23.9 47.5
---------------------------------------- ---------------------------- --------------------------- ----------------
The drawn/undrawn facilities at 1 August 2021 are as follows:
Total facility Drawn Undrawn
GBPm GBPm GBPm
------------------------------------ ---------------------------- --------------------------- ----------------
Revolving credit facility - three years,
expires February 2022 20.0 - 20.0
Revolving credit facility - two years,
expires April 2023 10.0 - 10.0
Revolving credit facility - five years,
expires February 2025 20.0 20.0
Overdraft 5.0 - 5.0
---------------------------------------- ---------------------------- --------------------------- ----------------
55.0 - 55.0
---------------------------------------- ---------------------------- --------------------------- ----------------
During the year to 27 January 2018 the Group entered the three revolving
credit facilities of periods of 3 - 5 years with Royal Bank of Scotland
plc, Bank of Scotland plc and HSBC plc. These facilities provided GBP60m
of sterling debt facilities. After subsequent negotiations in March
2019, March 2020 and April 2021, these facilities will be reduced to
GBP30m in February 2022 and to GBP20m in April 2023, with that facility
due to expire in February 2025.
14 Retirement benefit obligations
On 1 May 2016 the A.G. BARR p.l.c. (2008) Pension and Life Assurance
Scheme was closed to future accrual following a negotiated agreement
between the Company and the board of trustees.
The defined retirement benefit scheme had a deficit of GBP4.8m as at
1 August 2021 (as at 25 July 2020: GBP9.7m, 24 January 2021: GBP7.9m).
The reconciliation of the closing deficit is as follows:
Unaudited Unaudited Audited
Year ended
6 months ended 6 months ended 24 January
1 August 2021 25 July 2020 2021
GBPm GBPm GBPm
===================================== -------------- -------------- ----------------
Opening present value of obligation (123.9) (127.3) (127.3)
Current service cost -- (0.1)
Interest cost (0.9) (1.1) (2.0)
Remeasurement - changes in financial
assumptions (1.4) (5.2) (0.4)
Benefits paid 2.8 2.8 5.9
----------------------------------------- ============== ============== ================
Closing position (123.4) (130.8) (123.9)
----------------------------------------- ============== ============== ================
Opening fair value of plan assets 116.0 116.8 116.8
Interest income 0.8 1.0 1.8
Remeasurement - actuarial return
on assets 2.9 4.4 1.0
Employer contributions 1.7 1.7 2.3
Benefits paid (2.8) (2.8) (5.9)
----------------------------------------- ============== ============== ================
Closing fair value of plan assets 118.6 121.1 116.0
----------------------------------------- ============== ============== ================
As at 1 August As at 25 July As at 24 January
2021 2020 2021
GBPm GBPm GBPm
===================================== -------------- -------------- ----------------
Closing present value of obligation (123.4) (130.8) (123.9)
Closing fair value of plan assets 118.6 121.1 116.0
----------------------------------------- ============== ============== ================
Closing net deficit (4.8) (9.7) (7.9)
----------------------------------------- ============== ============== ================
The key financial assumptions used to value the liabilities were as
follows:
As at 1 August As at 25 July As at 24 January
2021 2020 2021
%% %
------------------------------------- -------------- ------------- ----------------
Discount rate 1.6 1.4 1.4
Inflation assumption 3.3 2.9 2.9
----------------------------------------- -------------- -------------- ----------------
15 Movements in own shares held by employee benefit trusts
During the six months to 1 August 2021 the employee benefit trusts
of the Group acquired 21,936 (six months to 25 July 2020: 22,763; year
to 24 January 2021: 47,061) of the Company's shares. The total amount
paid to acquire the shares has been deducted from shareholders' equity
and is included within retained earnings. At 1 August 2021 the shares
held by the Company's employee benefit trusts represented 781,002 (25
July 2020: 857,078; 24 January 2021: 871,660) shares at a purchased
cost of GBP4.7m (25 July 2020: GBP5.2m; 24 January 2021: GBP5.2m).
112,594 (six months to 25 July 2020: 9,836; year to 24 January 2021:
19,552) shares were utilised in satisfying share options from the Company's
employee share schemes during the same period.
The related weighted average share price at the time of exercise for
the six months to 1 August 2021 was GBP5.19 (six months to 25 July
2020: no shares sales; year to 24 January 2021: GBP5.17)
16 Contingencies and commitments
Unaudited Unaudited Audited
As at 1 August As at 25 As at 24 January
2021 July 2020 2021
GBPm GBPm GBPm
----------------------------------- --------------- ---------- -----------------
Commitments for the acquisition
of property, plant and
equipment 0.6 1.4 0.8
--------------------------------------- --------------- ---------- -----------------
17 Related party transactions
There have been no related party transactions in the first 27 weeks
of the current financial year which have materially affected the financial
position or performance of the Group.
Statement of Directors' Responsibilities
Company law requires the directors to prepare statements for each financial year. Under that
law the directors are required to prepare group financial statements in accordance with international
accounting standards in conformity with the requirements of the Companies Act 2006 and International
Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies
in the European Union.
The directors confirm that these consolidated condensed interim financial statements have
been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting.
The interim management report includes a fair review of the information required by DTR 4.2.7
and DTR 4.2.8, namely:
-- an indication of important events that have occurred during the first six months and their
impact on the condensed set of financial statements, and a description of the principal risks
and uncertainties for the remaining six months of the financial year; and
-- material related party transactions in the first six months and any material changes in
the related party transactions described in the last annual report.
The directors of A.G. BARR p.l.c. that served during the 6 months to 1 August 2021 and up
to the date of signing, and their respective responsibilities, were:
J. R. Nicolson (Chairman)
R.A. White (Chief Executive)
S. Lorimer (Finance Director)
J.D. Kemp (Commercial Director)
W.R.G Barr
P. Powell (resigned 1 July 2021)
D.J. Ritchie
S.V. Barrett
N.B.E. Wharton
M. Allen (appointed 1 July 2021)
Z.L. Howorth (appointed 1 July 2021)
For and on behalf of the Board of directors
Roger White Stuart Lorimer
Chief Executive Finance Director
Glossary
Non-GAAP measures are provided because they are tracked by management to assess the Group's
operating performance and to inform financial, strategic and operating decisions.
Definition of non-GAAP measures used are provided below:
Capital expenditure is a non-GAAP measure and is defined as the cash purchases of property,
plant and equipment and is disclosed in the consolidated condensed cash flow statement.
Earnings per share before exceptional items is a non-GAAP measure calculated by dividing
profit attributable to equity holders before exceptional items by the weighted average number
of shares in issue.
Net cash at bank is a non-GAAP measure deducting loan balances from cash and cash equivalents.
Operating margin before exceptional items is a non-GAAP measure calculated by dividing operating
profit before exceptional items by revenue.
Profit attributable to equity holders after exceptional items is a non-GAAP measure calculated
as profit attributable to equity holders less any exceptional items. This figure appears on
the consolidated condensed income statement.
Profit before tax and exceptional items is a non-GAAP measure calculated as profit before
tax less any exceptional items. This figure appears on the consolidated condensed income statement.
Reconciliation of non-GAAP measures
Unaudited Unaudited
----------------------------------------------------------- ---------------------------- ---------------------------
6 months ended 1 August 2021 6 months ended 25 July 2020
Profit before tax and exceptional items GBPm GBPm
----------------------------------------------------------- ---------------------------- ---------------------------
Profit before tax 24.4 5.1
Exceptional items (0.7) 11.5
----------------------------------------------------------- ---------------------------- ---------------------------
Profit before tax and exceptional items 23.7 16.6
----------------------------------------------------------- ---------------------------- ---------------------------
6 months ended 1 August 2021 6 months ended 25 July 2020
Operating profit before exceptional items GBPm GBPm
----------------------------------------------------------- ---------------------------- ---------------------------
Operating profit 24.6 5.6
Exceptional items (0.7) 11.5
----------------------------------------------------------- ---------------------------- ---------------------------
Operating profit before exceptional items 23.9 17.1
----------------------------------------------------------- ---------------------------- ---------------------------
6 months ended 1 August 2021 6 months ended 25 July 2020
Operating margin before exceptional items GBPm GBPm
----------------------------------------------------------- ---------------------------- ---------------------------
Revenue 135.3 113.2
Operating profit before exceptional items 23.9 17.1
----------------------------------------------------------- ---------------------------- ---------------------------
Operating margin before exceptional items 17.7% 15.1%
----------------------------------------------------------- ---------------------------- ---------------------------
6 months ended 1 August 2021 6 months ended 25 July 2020
Net cash at bank GBPm GBPm
----------------------------------------------------------- ---------------------------- ---------------------------
Cash and cash equivalents 65.6 90.4
Loans and other borrowings - (59.9)
----------------------------------------------------------- ---------------------------- ---------------------------
Net cash at bank 65.6 30.5
----------------------------------------------------------- ---------------------------- ---------------------------
Earnings per share before exceptional items 6 months ended 1 August 2021 6 months ended 25 July 2020
----------------------------------------------------------- ---------------------------- ---------------------------
Profit attributable to equity holders of the Company before
exceptional items 13.5 11.7
Weighted average number of ordinary shares in issue 111,104,168 111,175,040
----------------------------------------------------------- ---------------------------- ---------------------------
Earnings per share before exceptional items (p) 12.15 10.52
----------------------------------------------------------- ---------------------------- ---------------------------
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END
IR LRMLTMTMTBFB
(END) Dow Jones Newswires
September 28, 2021 02:00 ET (06:00 GMT)
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