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(Sharecast News) - Irn-Bru maker AG Barr backed its full-year guidance on Tuesday as it reported a rise in interim revenue, but shares slid as it warned of a 10m revenue hit from supply chain issues.
In an update for the 26 weeks to 1 August, the company said first-half revenue is expected to rise around 8% on the same period a year earlier to 246m, reflecting continued core brand growth and the contribution from recent acquisitions.
First-half operating margin is expected to be in the middle of the guidance range of 14% to 16%.
The drinks company said that while it was pleased with its performance during the period, as the second quarter progressed, revenue was impacted by reduced stock availability, mainly from internal supply chain issues linked to its capability and capacity change programme, but also by external issues associated with third party manufacturing. The revenue impact is estimated at around 10m for H1.
"Market share gains, encouraging innovation performance and supply chain actions give confidence of an improved revenue performance in H2," it said.
"As such, the company is anticipating double-digit percentage revenue growth for the full year. The benefits from integration and insourcing actions underpin a strengthening operating margin in H2 and delivery of profit expectations for the full year."
Analyst consensus is for full-year adjusted pre-tax profit of 71.9m.
At 1000 BST, the shares were down 7% at 600p.
Russ Mould, investment director at AJ Bell, said: "Rather than basking in the afterglow of Glasgow's successful Commonwealth Games, AG Barr, the company behind Scotland's favourite soft drink, saw its first-half update fall flat.
"What makes it worse is the disappointing performance is entirely of the Barr's own making, with supply chain issues leading to a 10 million revenue hit.
"Investors will be hoping this is a one-off for a business which typically has a pretty strong operational track record and that an improved second-half can restore some fizz to the share price."
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