Interim Results

RNS Number : 0207E

Barr(A.G.) PLC

23 September 2008

 



For immediate release                                                                                                      23 September 2008

A.G.BARR p.l.c.

INTERIM RESULTS 

A.G.BARR p.l.c. the soft drinks group announces its interim results today for the 6 months ended 26th July 2008.

Key Points

• Profit on ordinary activities before tax and exceptional items increased by 9.8% to £11.10 million (2007 - £10.13 million).

• Total turnover versus the comparable period was up 5.8% at £82.4 million (2007 - £77.9 million).

• The IRN-BRU brand grew revenue by 5.8%, sales increased across England and Wales as well as Scotland.

• Acquisition of exotic juice drinks business, Groupe Rubicon for £59.8 million, was completed on 29th August.

• Interim dividend to increase from 11.00p to 11.60p per share, an increase of 5.5%.

Commenting on the results Chief Executive, Roger White, said:

'This has been the second summer of poor weather in a row - despite this we have continued to see excellent top line sales growth. Our core brands have performed well and we have seen a strong performance from the Rockstar brand in its first year.

We completed our acquisition of the Rubicon exotic juice business in late August after receiving overwhelming shareholder approval for the Transaction. We are now working with the Rubicon team to ensure we maintain the excellent growth momentum of the business.

The combination of poor summer weather, volatile input costs and the generally gloomy economic outlook will make the balance of the year challenging, however assuming the market doesn't deteriorate significantly from now, we anticipate meeting our expectations for the full year'

For more information, please contact:

A.G.Barr    Tel: [phone]    Buchanan Communications    Tel: [phone]

Roger White, Chief Executive      Tim Thompson / Nicola Cronk

Alex Short, Finance Director

  Interim Statement

Turnover increased by 5.8% to £82.4m for the six months to 26th July, 2008 despite the lack of any appreciable improvement in this year's summer weather relative to last year. Profit before taxation, excluding exceptionals, was £11.1m, an increase of 9.8% compared to the same period last year. Earnings per share were 44.16 pence (2007: 39.22 pence), an increase of 12.6%.

This performance was achieved against a total soft drinks market with value growth of 2.7% and flat volume in the period (source: Nielsen). Within the overall market, carbonates continued to perform well with value growth of 6% versus last year and volume up 2%; this includes the fast growing sports & energy sub sector.

Total A.G.Barr sales in the period were boosted by our new partnership with Rockstar Energy and by a small contribution from our two new brands Taut and Vitsmart. Encouragingly, underlying sales revenue excluding these new brands increased by 3.6%.

The sales of Taut and Vitsmart were from residual stocks being sold into the market prior to the planned relaunches which will take place in the second half of the year following major product and packaging redesigns of both brands.

The IRN-BRU brand increased sales revenue by 5.8% in the period reflecting the continued strong performance of the brand both in its core Scottish market but also increasingly across the rest of the UK. We have continued our investment behind IRN-BRU with a range of consumer and trade activities including new advertising creative work and a free IRN-BRU glass promotion which has been executed across Scotland during the summer months.

Strong revenue growth from our regional carbonates brands including the Barr range and KA more than offset continued weakness in Tizer and difficult market conditions in bottled water.

Our still fruit drinks brands Simply and St Clement's continued to gain momentum despite the poor summer weather with a combined growth of 23%. St Clement's and Simply are in revenue terms now 50% bigger than the Tizer brand.

Operational cost pressures have escalated over the past six months with record oil prices impacting costs especially in packaging, energy and fuel. Whilst the impact of these cost increases is inescapable, we have seen the continued benefits of our prior year restructuring and ongoing cost control initiatives which have helped to maintain our margins. The immediate cost impacts of the current year are also being offset, in part, by price increases taken early in the period.

We have continued to take a long term view of the development of our business both through the investment in our brands and the extension of our portfolio as well as in the further development of our operational platform. We completed the £2.85m purchase of a further 20.5 acre site with 155,000 square feet of warehouse space adjacent to our Cumbernauld facility in early September. This purchase will not only allow for future expansion but will also immediately decrease operating costs through increased efficiency of raw material storage, less finished product stock movements and reduced outside storage requirements.

On 5th August, 2008 we announced the acquisition of Groupe Rubicon Ltd, a manufacturer and distributor of branded exotic juice drinks. Following approval at our EGM on 25th August we completed the transaction as planned on 29th August. The Rubicon brand and business will bring a new dimension to our already strong portfolio and we look forward to working with the Rubicon team to maintain the sales momentum which they have delivered over the recent past and to access the planned synergies outlined in the acquisition documentation. As the acquisition has moved the Company into a debt position we are now considering a range of relevant interest rate hedges to ensure that we manage the interest rate risk related to our debt.

Given the increase in underlying profit and the continued satisfactory financial position of the Company, your directors have declared an interim dividend of 11.60p per share, payable on 24th October, 2008 to shareholders on the register on 3rd October, 2008. This is an increase of 5.45% on the interim dividend paid last year.

Turnover, to date, in the second half has continued to be ahead of the prior year but the sustained period of very poor weather through August has had a negative impact on the total market with increased levels of competitor promotional activity becoming evident. The soft drinks market continues to be competitive across all sectors and channels and input costs remain volatile. Assuming, however, market conditions do not significantly weaken, we remain confident that, for the full year, our current plans will allow us to meet our expectations across both the existing A.G.Barr business and the new Rubicon acquisition.

W R G Barr    R A White

CHAIRMAN    CHIEF EXECUTIVE

  A.G.BARR p.l.c.

Risks and Uncertainties

The group's performance over the remaining six months of the financial year could be materially impacted by a number of potential risks and uncertainties. The principal risks and uncertainties for the

remaining six months of the year are discussed below. Full details of the group's risk profile can be found on pages 32 to 33 of the annual report for the year ended 26th January, 2008. The annual report can be obtained from the A.G.BARR website www.agbarr.co.uk.

Risk management is carried out by the finance department under policies approved by the board of directors. The group finance department identifies, evaluates and manages financial risks in close co-operation with the group's operating units. The board provides guidance on overall risk management including foreign exchange risk, interest rate risk, credit risk and investment of excess liquidity.

With the exception of cash flow and fair value interest rate risk, the principal risks and uncertainties have not changed from the year ended 26th January, 2008.  The main risks listed in the annual report were:

• Market risk (including foreign exchange risk, price risk and cash flow and fair value interest rate risk)

• Credit risk

• Liquidity risk

• Capital risk

The acquisition of Groupe Rubicon Limited could change cash flow and fair value interest rate risk in the second half of the year. The acquisition was completed in the second half of the year. The total cash consideration was funded from existing cash resources and a new debt facility. The group has agreed a new £70m facility with the Royal Bank of Scotland which involves a £40m term loan and a £30m revolving credit facility. As part of the Class 1 requirements, cash flow projections have been prepared to confirm that the group is able to continue to trade profitably and that sufficient headroom exists  within the context of the agreed facility. The cash flows included a sensitivity analysis to project substantial adverse changes in market interest rates.

  A.G.BARR p.l.c.

Consolidated Income Statement

				Restated
		6 months ended 26.07.08		6 months ended 28.07.08		Year ended 26.01.08
	Note	£000		£000		£000
Revenue		82,373		77,883		148,377
Cost of sales		41,807		39,871		76,068
Gross profit		40,566		38,012		72,309
Net operating expenses		30,050		28,073		51,920
Operating profit before exceptional items		10,516		9,939		20,389
Exceptional items
Restructuring costs		-		107		639
Exceptional credit	5	(130)		-		(171)
Exceptional items		(130)		107		468
Operating profit		10,646		9,832		19,921
Finance income		689		435		924
Finance costs		(74)		(241)		(12)
Profit on activities before tax		11,261		10,026		20,833
Tax on profit	6	2,775		2,594		3,995
Profit attributable to equity shareholders		8,486		7,432		16,838
Earnings per share
Basic earnings per share		44.16		39.22		86.75
Diluted earnings per share		43.52		38.53		85.65
Dividends
Dividend per share paid		28.00		24.75		35.75
Dividend paid £000		5,373		4,673		6,751
Dividend per share proposed		11.60		11.00		28.00
Dividend proposed £000		2,258		2,141		5,449

 A.G.BARR p.l.c.

Consolidated Statement of Recognised Income and Expense

		6 months ended 26.07.08		6 months ended 28.07.08		Year ended 26.01.08
		£000		£000		£000
Actuarial gain recognised on defined benefit pension plans		-		-		5,167
Deferred tax recognised directly in equity		(87)		334		(2,649)
Current tax movements on items taken directly to equity		-		-		909
Net (expense) / income recognised directly in equity		(87)		334		3,427
Profit for the period		8,486		7,432		16,838
Total recognised income and expense for the period		8,399		7,766		20,265
Attributable to equity shareholders		8,399		7,766		20,265

  A.G.BARR p.l.c.

Consolidated Balance Sheet

		As at 26.07.08		As at 28.07.08		As at 26.01.08
	Note	£000		£000		£000
Non-current assets
Intangible assets	7	10,687		10,368		10,656
Property, plant and equipment	10	53,869		55,202		53,373
Deferred tax assets	9	3,270		774		-
		67,826		66,344		64,029
Current assets
Inventories		11,687		13,236		12,339
Trade and other receivables		35,093		32,804		25,965
Cash and cash equivalents		21,290		12,963		17,899
Current tax asset		-		-		557
Assets classified as held for sale	11	2,864		-		2,910
		70,934		59,003		59,670
Total assets		138,760		125,347		123,699
Current liabilities
Trade and other payables		35,344		33,304		28,163
Provisions	12	80		788		284
Current tax		2,734		1,739		-
		38,158		35,831		28,447
Non-current liabilities
Deferred income		72		73		72
Retirement benefit obligations	13	6,595		15,240		8,009
Deferred tax liabilities	9	5,904		-		2,393
		12,571		15,313		10,474
Capital and reserves attributable to equity shareholders
Called up share capital	14	4,865		4,865		4,865
Share premium account	14	905		905		905
Own shares held	14	(2,629)		(4,391)		(3,717)
Share options reserve	14	582		1,921		964
Retained earnings	14	84,308		70,903		81,761
		88,031		74,203		84,778
Total equity and liabilities		138,760		125,347		123,699

  A.G.BARR p.l.c.

Consolidated Cash Flow Statement

	Note	6 months ended 26.07.08 £000		6 months ended 28.07.07 £000		Year ended 26.01.08 £000
Operating activities
Profit on ordinary activities before tax		11,261		10,026		20,833
Adjustments for
Interest receivable		(689)		(435)		(924)
Interest payable		74		241		12
Depreciation of property, plant and equipment	10	3,387		3,312		6,668
Impairment of plant		-		-		96
Amortisation of customer relationships	7	114		117		233
Share-based payments costs		175		163		385
Gain on sale of property, plant and equipment		(15)		(24)		(33)
Government grants written back		-		-		(1)
Operating cash flows before movements in working capital		14,307		13,400		27,269
Decrease / (increase) in inventories		721		(1,827)		(930)
(Increase) in receivables		(9,044)		(7,398)		(559)
Increase / (decrease) in payables		7,406		3,351		(1,922)
Net (decrease) in retirement benefit obligation		(1,920)		(844)		(2,855)
Cash generated by operations		11,470		6,682		21,003
Tax on profit repaid / (paid)		669		(655)		(3,259)
Net cash from operating activities		12,139		6,027		17,744
Investing activities
Acquisition of subsidiary	8	(20)		-		-
Acquisition of intangible assets		(140)		(743)		(892)
Proceeds on sale of property, plant and equipment		113		767		1,043
Purchase of property, plant and equipment		(3,995)		(6,968)		(12,448)
Interest received		689		435		924
Net cash used in investing activities		(3,353)		(6,509)		(11,373)
Financing activities
Purchase of own shares		(767)		(802)		(2,227)
Sale of own shares		819		64		1,421
Interest paid		(74)		(241)		(12)
Dividends paid		(5,373)		(4,673)		(6,751)
Net cash used in financing activities		(5,395)		(5,652)		(7,569)
Net increase/(decrease) in cash		3,391		(6,134)		(1,198)
Cash and cash equivalents at beginning of period		17,899		19,097		19,097
Cash and cash equivalents at end of period		21,290		12,963		17,899

  Notes to the Accounts

1. General information

The company is a limited liability company incorporated and domiciled in the U.K. The address of its registered office is A.G.BARR p.l.c., Westfield House, 4 Mollins Road, Cumbernauld G68 9HD.

This condensed consolidated interim financial information does not comprise statutory accounts within the meaning of section 240 of the Companies Act 1985. Statutory accounts for the year ended 26th January, 2008 were approved by the board of directors on 31st March, 2008 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 237 of the Companies Act 1985.

This condensed consolidated interim financial information has been reviewed, not audited.

2. Basis of preparation

This condensed consolidated interim financial information for the six months ended 26th July, 2008 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34, Interim financial reporting as adopted by the European Union. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 26th January, 2008, which have been prepared in accordance with IFRSs as adopted by the European Union.

3. Accounting policies

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 26th January, 2008, as described in those annual financial statements. 

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

The following new standards, amendments to standards or interpretations are mandatory for the first time for the financial year beginning 27th January, 2008, but are not currently relevant for the group:

• IFRIC 11, IFRS 2 - Group and treasury share transactions.

• IFRIC 12, Service concession arrangements.

• IFRIC 14, IAS 19 - The limit on a defined benefit asset, minimum funding requirements and their interaction.

The group's primary basis of segmentation is by geography. For management purposes, the group is currently organised into one business segment being the manufacture, sale and distribution of soft drinks. The directors are of the opinion that there is only one reportable geographical segment.

Restatement

The figures for the six months to 28th July, 2007 have been restated to bring the reported figures into line with the other periods presented. Following changes to internal reporting different units in the business were reported in an inconsistent manner at 28th July, 2007. The restatement of these figures at 26th July, 2008 has resulted in an increase to cost of sales of £2,520,000 and a decrease in net operating expenses of £2,520,000. There is no impact on operating profit or profit attributable to equity shareholders.

4. Seasonality of operations

Due to the seasonality of the operations approximately half the revenues and operating profits are usually expected in both of the first half and second half of the year.

5. Exceptional items

The exceptional credit of £130,000 included within the exceptional items is the release of a restructuring provision (see note 12) that is no longer required.

During the six months to 28th July, 2007 the group incurred redundancy costs in relation to its Pitcox site totalling £60,000. A further £47,000 of exceptional costs were incurred in relocating assets to the Cumbernauld production site from the Atherton factory site, which ceased production during the period.

In the year to 26th January, 2008 £487,000 of costs were incurred in the continued running of Atherton and the removal of the IT infrastructure from the site. £56,000 of redundancy costs were charged in relation to restructuring at the Pitcox site along with an impairment charge of £96,000. This was offset by £171,000 of a release of a restructuring provision no longer required.

6. Tax on profit

The interim period tax charge is accrued based on the estimated average annual effective income tax rate of 28% (six months ended 28th July, 2007: 28%).

In the six months to 28 July, 2007 the effect of the changes enacted in the Finance Act 2007 were recognised reducing U.K. Corporation tax rates from 30% to 28%. This resulted in a net increase of £98,000 in profit and a net decrease in other recognised gains of £400,000 in respect of the change in the tax rate.

7. Intangible assets

			Goodwill		Brands		Customer relationships			Water rights	Total
				£000		£000		£000	£000		£000
Carrying amount at start of period				1,917		7,390		607	742		10,656
Addition in the period				242		-		-	-		242
Adjustments to cost				3		(100)		-	-		(97)
Amortisation for period				-		-		(114)	-		(114)
Carrying amount at end of period				2,162		7,290		493	742		10,687

The addition to goodwill in the six months to 26th July, 2008 is the recognition of the provisional value of goodwill arising on the acquisition of Taut International Limited (see note 8).

The Vitsmart and Vitaminsmart brands were acquired in the second half of the year to 26th January, 2008 with £15,000 of goodwill provisionally being recognised on the acquisition.

The adjustment of £3,000 to the goodwill cost has arisen due to the finalisation of the costs for the acquisition of the Vitsmart and Vitaminsmart brands.  During the six months to 26th July, 2008 further negotiations took place over the purchase price of the Vitsmart and Vitaminsmart brands. The initial purchase price, including legal fees, was £390,000 due to be paid over a period of three years. Subsequent negotiations with the seller resulted in the purchase being completed in April 2008 for a total reduced consideration, including legal fees, of £290,000. This has resulted in a £100,000 reduction in the carrying value of the Brands balance.

Customer relationships were intangible assets recognised on the acquisition of the Strathmore Water business. The amortisation charge represents the spreading of the cost over the duration of the contractual period and has a further estimated life of three years.

8. Acquisitions

On 28th January, 2008 the group acquired 100% of the share capital of Taut International Limited, a group of companies specialising in the marketing of sports drinks. The consideration was £1. A further £40,000 was incurred on legal fees. 

The provisional fair values from the acquisition are detailed in the table below. In accordance with IFRS 3, Business Combinations, adjustments to the fair values of the assets acquired and liabilities assumed can be updated to 27th January, 2009, twelve months from the date of the acquisition.

		Recognised values on acquisition	Fair value adjustments	Fair value
		£000	£000	£000
Property, plant and equipment		18	-	18
Inventories		84	-	84
Trade receivables		64	-	64
Cash and cash equivalents		20	-	20
Trade and other payables		(388)	-	(388)
Total		(202)	-	(202)
Provisional goodwill arising on acquisition				242
Total consideration, satisfied by cash				40
				£000
Purchase consideration settled in cash				40
Cash and cash equivalents in subsidiary acquired				(20)
Cash outflow on acquisition				20

Taut (U.K.) Limited is a trading subsidiary of Taut International Limited. Taut (U.K.) Limited formed part of the acquisition detailed above. It has tax losses of approximately £4,400,000. Under IFRS 3 a  deferred tax asset should be recognised if A.G.BARR p.l.c. can use the unrelieved tax losses. At the date of approval of these statements A.G.BARR p.l.c. was unable to conclude with reasonable certainty that the tax losses can be utilised and therefore have not recognised a deferred tax asset at the balance sheet date in respect of these losses. The unrecognised deferred tax asset would be approximately £1,232,000. The position will be reviewed in the six months to the 31st January, 2009.

9. Deferred tax

The enactment of the 2008 budget in July confirmed the withdrawal of Industrial Building allowances by 2011. This decision has meant that the company will no longer be eligible for future tax deductions until the assets are ultimately sold. As a direct consequence of this legislative change, a substantially increased taxable temporary difference of £11.6m has arisen, crystallising a deferred tax liability of £3.3m.  

Although management have no stated intention of disposing of these buildings in the foreseeable future, a commercial decision to realise the tax base is likely to be taken by selling them together with the related land at the end of their useful economic lives. Management measures deferred tax assets and liabilities to reflect the dual based manner in which they intend to recover the carrying amount of its assets, and as such recognises a deferred tax asset of £3.2m, which reflects the future tax deduction that will crystallise when the assets are sold.

The remaining £2.7m of deferred tax liabilities relates to other taxable temporary differences.

10. Property, plant and equipment

		6 months ended 26.07.08		6 months ended  28.07.07		Year ended  26.01.08
		£000		£000		£000
Opening net book value		53,373		52,278		52,278
Additions		3,963		6,979		11,779
Assets acquired through business combinations		18		-		-
Transfers to assets classified as held for sale		-		-		(3,006)
Disposals		(98)		(743)		(1,010)
Depreciation		(3,387)		(3,312)		(6,668)
Closing net book value		53,869		55,202		53,373

The closing balance includes £998,000 (28th July, 2007: £784,000) of assets under construction.

11. Assets classified as held for sale

The reduction of £46,000 in the Assets classified as held for sale is the result of selling a bottling line, classified within this heading, in the period. An impairment charge of £96,000 was recognised in the year to 26th January, 2008 to bring the net book value of the asset down to its realisable value. As a result no gain or loss was recognised on the disposal in the six months to 26th July, 2008.

12. Provisions

		6 months ended 26.07.08		6 months ended 28.07.07		Year ended 26.01.08
		£000		£000		£000
Opening balance		284		2,262		2,262
Provision utilised during the period		(74)		(1,474)		(1,807)
Provision released during the period		(130)		-		(171)
Closing balance		80		788		284

The provision relates to expected restructuring costs, including consulting fees and employee termination costs following the announcement made in the year to 27th January, 2007 to close the Atherton factory. The remaining provision is expected to be utilised when the site is sold.

13. Retirement benefit obligations

The retirement benefit obligations have continued to be accounted for under the actuarial assumptions made at 26th January, 2008 with the exception of the expected return on plan assets. This has changed from 6.7% to 6.4%.

14. Capital and reserves attributable to equity shareholders

	Share capital	Share premium account	Own shares held	Share options reserve	Retained earnings	Total
	£000	£000	£000	£000	£000	£000
Opening balance at 27th January, 2008	4,865	905	(3,717)	964	81,761	84,778
Own shares purchased	-	-	(767)	-	-	(767)
Proceeds of share option exercise	-	-	819	-	-	819
Recognition of share-based payment costs	-	-	-	175	-	175
Transfer of reserve on share award	-	-	1,036	(470)	(566)	-
Deferred tax on items taken directly to equity	-	-	-	(87)	-	(87)
Profit for the period	-	-	-	-	8,486	8,486
Dividends paid	-	-	-	-	(5,373)	(5,373)
Closing balance at 26th July, 2008	4,865	905	(2,629)	582	84,308	88,031
Opening balance at 28th January, 2007	4,865	905	(4,439)	1,923	68,123	71,377
Own shares purchased	-	-	(802)	-	-	(802)
Proceeds of share option exercise	-	-	64	-	-	64
Recognition of share-based payment costs	-	-	-	163	-	163
Release of shares on share award	-	-	308	-	-	308
Transfer of reserve on share award	-	-	478	(194)	(284)	-
Tax on items taken directly to equity	-	-	-	29	305	334
Profit for the period	-	-	-	-	7,432	7,432
Dividends paid			-	-	(4,673)	(4,673)
Closing balance at 28th July, 2007	4,865	905	(4,391)	1,921	70,903	74,203

During the six months to 26th July, 2008 the group acquired 63,422 (28th July, 2007: 62,154) shares. These are held in trust and are expected to be used to meet the future requirements of the company's employee share schemes. 

The total amount paid to acquire the shares has been deducted from shareholders' equity and classified as Own shares held. 154,814 shares (28th July, 2007: 99,020) shares were released from the company's employee share schemes during the same period.

The related weighted average share price at the time of exercise was £12.27 (28th July, 2007: £12.93) per share.

15. Contingencies and commitments

		As at 26.07.08	As at 28.07.07	As at 26.01.08
		£000	£000	£000
Commitments for the acquisition of the property, plant and equipment		1,409	901	1,996

16. Post balance sheet events

On 5th August, 2008 A.G.BARR p.l.c. announced the acquisition of Groupe Rubicon Limited for an initial cash consideration of £59.8 million plus £1.25 million in respect of the factory occupied by Groupe Rubicon Limited. Groupe Rubicon Limited is a manufacturer and distributor of branded exotic juice drinks. This transaction was given shareholder approval at an extraordinary general meeting on 25th August and the transaction was completed on 29th August.

The group also announced on 5th August, 2008 the purchase of land and warehousing adjacent to their Cumbernauld facility for approximately £2.85 million.

The interim dividend of 11.60p per share was approved by the board on 18th September, 2008 and will be paid on 24th October, 2008 to shareholders on record as at 3rd October, 2008.

17. Related party transactions

Transactions between the company and its subsidiaries, which are related companies, have been eliminated on consolidation.

The group's retirement benefit plans are administered by an independent third party service provider. During the six months the service provider charged the group £216,000 (28th July, 2007: £227,000) for administration services in respect of the retirement benefit plans. At 26th July, 2008 a nil balance (28th July, 2007: nil) was outstanding to the service provider.

Statement of Directors' Responsibilities

The directors' confirm that this condensed consolidated interim financial information has been prepared in accordance with IAS 34 as adopted by the European Union and that 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.

Forward-looking statements

Certain statements in this interim report are forward-looking. Although the group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.

Roger White 

Chief Executive 

23rd September, 2008

Alex Short 

Finance Director

23rd September, 2008

  Independent Review Report to A.G.BARR p.l.c.

Introduction

We have been engaged by the company to review the condensed set of financial statements in the interim financial report for the six months ended 26th July, 2008 which comprises the consolidated income statement, consolidated balance sheet, consolidated cash flow statement and consolidated statement of recognised income and expense. We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report, including the conclusion, has been prepared for and only for the company for the purpose

of meeting the requirements of the Disclosure Rules and Transparency Rules issued by the United  Kingdom Listing Authority and for no other purpose. We do not, therefore, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Directors' responsibilities

The interim financial report, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing and presenting the interim financial report in accordance with the Disclosure Rules and Transparency Rules issued by the United Kingdom Listing Authority.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance

with International Financial Reporting Standards and International Financial Reporting Interpretations

Committee ('IFRIC') pronouncements as adopted by the European Union. The condensed set of financial statements included in this interim financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting' as adopted by the European Union.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the interim financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements

(U.K. and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the U.K. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (U.K. and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim financial report for the six months ended 26th July, 2008 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union, and the Disclosure Rules and Transparency Rules issued by the United Kingdom Listing Authority.

Baker Tilly UK Audit LLP

Chartered Accountants

Breckenridge House

274 Sauchiehall Street

Glasgow G2 3EH

23rd September, 2008

 

END

 

 

IR EASNAASSPEFE