I N T E R I M R E P O R T 2 0 2 4
I N T R O D U C T I O N
"My first few months with the business has further cemented my view that AG Barr is an excellent business with exciting, tangible and deliverable growth opportunities.
I N T H I S R E P O R T
Interim Statement | 1 |
Consolidated Condensed |
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Income Statement | 3 |
Consolidated Condensed Statement |
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of Financial Position | 4 |
Consolidated Condensed Statement |
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of Comprehensive Income | 5 |
Consolidated Condensed Statement |
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of Changes in Equity (Unaudited) | 6 |
Consolidated Condensed Statement |
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of Changes in Equity (Audited) | 7 |
Consolidated Condensed |
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Cash Flow Statement | 8 |
Notes to the Consolidated |
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Condensed Financial Statements | 9 |
Statement of Directors' Responsibilities | 21 |
I am pleased to report a strong set of first half results. The business has delivered both revenue and profit growth as well as good progress on our key strategic margin rebuild programme.
We continue to invest in our supply chain to build the capacity to support our growth plans and manufacture more volume in-house. This will deliver tangible benefits including enhanced margin and improved service resilience.
We anticipate a strong H2 performance from our four core brands - IRN-BRU, Rubicon, Boost and FUNKIN - in particular, with current trading momentum underpinned by further marketing and innovation activities.
Guidance on 2024/25 revenue and operating margin is unchanged. We remain confident of continued, sustainable growth over the long term, in line with our strategic ambitions."
Glossary | 22 |
Reconciliation of non-GAAP measures | 23 |
Independent Review Report to |
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A.G. BARR p.l.c. | 25 |
Euan Sutherland
Chief Executive | |
For more information
visit our website agbarr.co.uk
A.G. BARR p.l.c. Interim Report 2024
I N T E R I M S T A T E M E N T
"We are pleased to report a strong H1 performance through execution of our clear and consistent growth strategy of building brands that people love."
Euan Sutherland | Mark Allen OBE |
Revenue increased 5.2% to £221.3m and operating margin (adjusted)* improved by 50 bps to 13.0%. This delivered profit before tax (adjusted)* growth of 8.5% to £29.3m.
Particularly pleasing was the performance of our Soft Drinks business where revenue increased 7.0%, driven by both volume and price. Rubicon was the stand out performer, delivering double digit growth in both volume and value.
Profit before tax of £24.9m included a non- recurring (£4.4m) adjusting item related to the business change projects involving the closure of Barr Direct and the integration of the Boost business.
These key projects progressed to plan in H1. The Barr Direct route to market closed at the end of June with no impact to customer service. Symbol and Independent retailers are now fully serviced through the wholesale route to market, supported by a larger in-house Field Sales team. The integration of the Boost business, acquired in 2022, is on track and will be completed during H2. Our expectation of
the payback from these two projects remains less than 2 years. Manufacturing synergies continue to be realised as production is insourced in line with our plan.
Market context
Soft drinks: The UK soft drinks market was up 2.0% versus the same period in the prior year. Growth was price led with volumes marginally down (0.4%), partly as a consequence of the disappointing early summer weather. Whilst value was up, the level of price inflation in the market has reduced significantly versus the peak in 2023. Overall, our performance was ahead of the market across both volume and value, with growth primarily arising in segments not measured by market analytic data.
(Source: Circana data for the 26 weeks to 27 July 2024).
Cocktails: Ready to drink (RTD) cocktails in the take home market grew 9.1%, well ahead of the wider pre-mixed alcoholic drinks market growth rate of 2.7%. FUNKIN's growth was ahead of both market segments and it remains the number one brand in the RTD cocktail market.
As has been widely documented, the UK on-trade market continued to experience challenging trading conditions during the period. The value of cocktails in the on-trade declined by (1.3%) in the year to March 2024 driven primarily by a (1.9%) reduction in the number of outlets. Cocktails performed relatively favourably within this wider trend, marginally growing volume share. Whilst we expect on-trade cocktail consumption to return to growth in the longer term, this may take some time given current economic and consumer trends.
(Source: Nielsen pre-mixed alcoholic drinks total coverage YTD 13/07/2024; CGA Q1 2024).
A.G. BARR p.l.c. Interim Report 2024 | 1 |
I N T E R I M S T A T E M E N T C O N T I N U E D
Business performance
Overall revenue growth of 5.2% driven by Soft drinks performance.
Change
vs H1
Revenue 2023/24
(£m) (%)
Soft drinks | £194.6m | 7.0% |
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Cocktail solutions (FUNKIN) | £21.1m | (9.4%) |
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Other (MOMA) | £5.6m | 7.7% |
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7.0% growth in Soft Drinks revenue was led by Rubicon, which continued to grow ahead of the market through distribution gains and an increase in marketing investment. Revenue from IRN-BRU was up through a combination of volume and value growth, with a highly effective Euros marketing campaign and continued market share gains in England. The focus for Boost this year is on margin improvement, including profit recovery and insourcing of production. This is progressing in line with plan. Our soft drinks business carried good momentum into H2 and we expect further growth in the second half supported by our promotional and marketing investment plans.
FUNKIN experienced a challenging H1 with revenue down (9.4%). The key driver of this decline was on-going weak consumer demand in the on-trade channel where late night venues remained particularly affected. More positively, the FUNKIN ready-to-drink (RTD) business has continued to grow at pace in the strategic growth channel of retail despite revenue in H1 being impacted by a short term issue with third party can production which impacted sales to retailers but is now resolved. With a more resilient supply chain now in place and an exciting innovation pipeline we expect FUNKIN to perform positively in H2.
MOMA maintained its growth in H1 with new distribution gains. We expect MOMA's growth to accelerate in H2 through further range development.
Cash flow and balance sheet
Net cash from operating activities of £13.0m was £2.1m below the prior year (2023/24 H1: £15.1m). This was primarily driven by the non-recurring costs associated with the business change projects.
We have managed working capital effectively across H1. We collected cash in a timely manner from our customers and had no significant unrecoverable debt during the period. Inventory levels have generally been good albeit we experienced a small number of specific issues with third party suppliers which temporarily reduced inventory below desired levels and are now resolved.
Capital expenditure* in H1 was £7.4m (2023/24 H1: £6.5m). As in the prior year, our plan sees higher capital expenditure expected in the second half of the year due to the timing of specific activities. During H1 the key project completed was the installation and commissioning of a new small PET line in Cumbernauld, which provides increased manufacturing capability and resilience
for the long term. The Cumbernauld factory asset refresh programme remains on track, and is expected to be completed by January 2026. Full year capital expenditure* in the current year is estimated at c.£20m (2023/24: £17.8m), with H2 expenditure concentrated on investment in Cumbernauld and Milton Keynes manufacturing lines.
The business closed the period with net cash at bank* of £43.7m. This was £3.6m lower than the Interim reporting date in the prior year, principally owing to the £12.3m cash outflow in acquiring Rio in October 2023. The closing net cash at bank* balance was £9.9m less than the period opening position (£53.6m) due to the normal funding of dividend, tax and capital expenditure, alongside the seasonal demands for higher working capital during the summer trading period. We expect our cash balance to increase in H2 as it has historically.
Board
As previously communicated, after 20 years, Jonathan Kemp stepped down from the Board in May and will retire from his position as Commercial Director at the end of September 2024. Jonathan will remain with the company until September 2025 to lead a number of projects and support a smooth transition.
We are pleased to announce the appointment of Dino Labbate. Dino joins in January 2025 from Britvic, in a newly created, broader role of MD A.G. BARR, reporting to the CEO.
The transition of CEO is now complete and has been executed successfully without any disruption to the business. Looking forward, the senior leadership team is fully focused on delivering the business' strategy and accelerating its growth trajectory.
Dividend
The Board has declared an interim dividend for the 26 weeks ended 27 July 2024 of 3.10 pence per share (2023/24: 2.65 pence) payable on
1 November 2024 to shareholders on the register on 4 October 2024. This is in line with our policy of the interim dividend being 25% of the prior final year dividend.
Outlook
The positive H1 performance was in line with our expectations and we have ambitious plans for H2 and beyond, which are consistent with our long term growth strategy. We will continue to invest behind our brands to drive revenue growth, and continue to progress our strategic project agenda to deliver margin improvement and strengthen our supply base. We remain conscious of the current pressure on consumers and will be responsive to changes in the dynamic markets in which we operate. We are confident that, assuming a reasonably settled external environment, the execution of our plans will result in a strong H2 and the delivery of a full year performance in line with current market expectations**.
Mark Allen | Euan Sutherland |
Chairman | Chief Executive |
- Items marked with an asterix are non-GAAP measures. Definitions and relevant reconciliations are provided in the Glossary on pages 22 to 24.
- Analyst consensus: FY24/25 Net Revenue £421.5m, PBT £57.2m (FY23/24 PBT £50.5m).
A.G. BARR p.l.c. Interim Report 2024 | 2 |
C O N S O L I D A T E D
C O N D E N S E D I N C O M E S T A T E M E N T
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| Unaudited | Unaudited | Audited |
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| Six months ended | Six months ended | Year ended |
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| 27 July 2024 | 30 July 2023 | 28 January 2024 |
| Note | £m | £m | £m |
Revenue | 6 | 221.3 | 210.4 | 400.0 |
Cost of sales |
| (132.2) | (131.0) | (245.8) |
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Gross profit | 6 | 89.1 | 79.4 | 154.2 |
Operating expenses |
| (64.8) | (52.2) | (104.1) |
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Operating profit | 8 | 24.3 | 27.2 | 50.1 |
Finance income | 9 | 0.8 | 0.7 | 1.4 |
Finance costs | 9 | (0.2) | (0.1) | (0.2) |
Profit before tax |
| 24.9 | 27.8 | 51.3 |
Tax on profit | 10 | (6.2) | (6.8) | (12.8) |
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Profit attributable to equity holders |
| 18.7 | 21.0 | 38.5 |
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Earnings per share (pence) |
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Basic earnings per share | 11 | 16.88 | 18.87 | 34.59 |
Diluted earnings per share | 11 | 16.72 | 18.67 | 34.24 |
A.G. BARR p.l.c. Interim Report 2024 | 3 |
C O N S O L I D A T E D C O N D E N S E D
S T A T E M E N T O F
F I N A N C I A L P O S I T I O N
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| Unaudited | Unaudited | Audited |
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| As at 27 July 2024 | As at 30 July 2023 As at 28 January 2024 | |
| Note | £m | £m | £m |
Non-current assets |
| 129.9 |
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Intangible assets |
| 115.6 | 130.4 | |
Property, plant and equipment |
| 107.8 | 102.2 | 109.0 |
Right-of-use assets |
| 4.6 | 5.2 | 5.2 |
Retirement benefit surplus | 17 | 6.2 | 3.2 | 3.2 |
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Current assets |
| 248.5 | 226.2 | 247.8 |
| 35.6 |
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| |
Inventories |
| 36.0 | 36.5 | |
Trade and other receivables |
| 94.1 | 93.9 | 63.8 |
Assets classified as held for sale | 13 | 2.1 | - | - |
Current tax asset |
| 0.2 | - | - |
Short-term investments |
| 32.5 | - | 20.0 |
Cash and cash equivalents |
| 17.3 | 47.3 | 33.6 |
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| 181.8 | 177.2 | 153.9 |
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Total assets |
| 430.3 | 403.4 | 401.7 |
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Current liabilities |
| 6.1 |
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Loans and other borrowings | 15 | - | - | |
Trade and other payables |
| 86.9 | 90.7 | 70.3 |
Derivative financial instruments | 14 | 0.5 | 0.3 | 0.3 |
Lease liabilities | 14 | 1.7 | 1.6 | 1.8 |
Provisions | 16 | 2.0 | 0.5 | 0.5 |
Current tax liabilities |
| - | 0.9 | 0.7 |
Non-current liabilities |
| 97.2 | 94.0 | 73.6 |
| 33.0 |
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Deferred tax liabilities |
| 28.8 | 32.3 | |
Lease liabilities | 14 | 2.6 | 3.2 | 3.1 |
Derivative financial instruments | 14 | 0.1 | - | - |
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Capital and reserves |
| 35.7 | 32.0 | 35.4 |
| 4.7 |
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Share capital |
| 4.7 | 4.7 | |
Share premium account |
| 0.9 | 0.9 | 0.9 |
Share options reserve |
| 3.1 | 4.0 | 4.0 |
Other reserves |
| (0.5) | (0.1) | (0.1) |
Retained earnings |
| 289.2 | 267.9 | 283.2 |
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| 297.4 | 277.4 | 292.7 |
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Total equity and liabilities |
| 430.3 | 403.4 | 401.7 |
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A.G. BARR p.l.c. Interim Report 2024 | 4 |
C O N S O L I D A T E D C O N D E N S E D
S T A T E M E N T O F
C O M P R E H E N S I V E I N C O M E
| Unaudited | Unaudited | Audited |
| Six months ended | Six months ended | Year ended |
| 27 July 2024 | 30 July 2023 | 28 January 2024 |
| £m | £m | £m |
Profit for the period | 18.7 | 21.0 | 38.5 |
Other comprehensive (expense)/income |
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Items that will not be reclassified to profit or loss | - |
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Remeasurements on defined benefit pension plans (Note 17) | 0.7 | 0.7 | |
Deferred tax movements on items above | - | (0.2) | (0.2) |
Items that will be or have been reclassified to profit or loss | (0.6) |
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Loss arising on cash flow hedges during the period | (0.3) | (0.3) | |
Deferred tax movements on items above | 0.2 | 0.1 | 0.1 |
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Other comprehensive (expense)/income for the period, net of tax | (0.4) | 0.3 | 0.3 |
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Total comprehensive income attributable to equity holders of the parent | 18.3 | 21.3 | 38.8 |
A.G. BARR p.l.c. Interim Report 2024 | 5 |
C O N S O L I D A T E D C O N D E N S E D
S T A T E M E N T O F
C H A N G E S I N E Q U I T Y ( U N A U D I T E D )
|
| Share | Share |
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| Share | premium | options | Other | Retained |
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| capital | account | reserve | reserves | earnings | Total |
| £m | £m | £m | £m | £m | £m |
At 28 January 2024 | 4.7 | 0.9 | 4.0 | (0.1) | 283.2 | 292.7 |
Profit for the period | - | - | - | - | 18.7 | 18.7 |
Other comprehensive expense | - | - | - | (0.4) | - | (0.4) |
Total comprehensive (expense)/income for the period | - | - | - | (0.4) | 18.7 | 18.3 |
Company shares purchased for use by employee benefit trusts | - | - | - | - | (1.9) | (1.9) |
Proceeds on disposal of shares by employee benefit trusts | - | - | - | - | 0.7 | 0.7 |
Recognition of share-based payment costs | - | - | 1.4 | - | - | 1.4 |
Transfer of reserve on share award | - | - | (2.3) | - | 2.3 | - |
Dividends paid | - | - | - | - | (13.8) | (13.8) |
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At 27 July 2024 | 4.7 | 0.9 | 3.1 | (0.5) | 289.2 | 297.4 |
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| Share | Share |
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| Share | premium | options | Other | Retained |
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| capital | account | reserve | reserves | earnings | Total |
| £m | £m | £m | £m | £m | £m |
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At 29 January 2023 | 4.7 | 0.9 | 3.4 | 0.1 | 259.7 | 268.8 |
Profit for the period | - | - | - | - | 21.0 | 21.0 |
Other comprehensive (expense)/income | - | - | - | (0.2) | 0.5 | 0.3 |
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Total comprehensive (expense)/income for the period | - | - | - | (0.2) | 21.5 | 21.3 |
Company shares purchased for use by employee benefit trusts | - | - | - | - | (2.6) | (2.6) |
Proceeds on disposal of shares by employee benefit trusts | - | - | - | - | 0.8 | 0.8 |
Recognition of share-based payment costs | - | - | 1.0 | - | - | 1.0 |
Transfer of reserve on share award | - | - | (0.3) | - | 0.3 | - |
Deferred tax on items taken direct to reserves | - | - | (0.1) | - | - | (0.1) |
Dividends paid | - | - | - | - | (11.8) | (11.8) |
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At 30 July 2023 | 4.7 | 0.9 | 4.0 | (0.1) | 267.9 | 277.4 |
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A.G. BARR p.l.c. Interim Report 2024 | 6 |
C O N S O L I D A T E D C O N D E N S E D
S T A T E M E N T O F
C H A N G E S I N E Q U I T Y ( A U D I T E D )
|
| Share | Share |
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| Share | premium | options | Other | Retained |
|
| capital | account | reserve | reserves | earnings | Total |
| £m | £m | £m | £m | £m | £m |
At 29 January 2023 | 4.7 | 0.9 | 3.4 | 0.1 | 259.7 | 268.8 |
Profit for the year | - | - | - | - | 38.5 | 38.5 |
Other comprehensive (expense)/income | - | - | - | (0.2) | 0.5 | 0.3 |
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Total comprehensive (expense)/income for the year | - | - | - | (0.2) | 39.0 | 38.8 |
Company shares purchased for use by employee benefit trusts | - | - | - | - | (3.6) | (3.6) |
Proceeds on disposal of shares by employee benefit trusts | - | - | - | - | 1.3 | 1.3 |
Recognition of share-based payment costs | - | - | 2.1 | - | - | 2.1 |
Transfer of reserve on share award | - | - | (1.6) | - | 1.5 | (0.1) |
Deferred tax on items taken direct to reserves | - | - | 0.1 | - | - | 0.1 |
Dividends paid | - | - | - | - | (14.7) | (14.7) |
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At 28 January 2024 | 4.7 | 0.9 | 4.0 | (0.1) | 283.2 | 292.7 |
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A.G. BARR p.l.c. Interim Report 2024 | 7 |
C O N S O L I D A T E D
C O N D E N S E D C A S H F L O W S T A T E M E N T
| Unaudited | Unaudited |
|
| Six months | Six months | Audited |
| ended 27 July | ended 30 July | Year ended |
| 2024 | 2023 | 28 January 2024 |
| £m | £m | £m |
Operating activities | 24.9 | 27.8 | 51.3 |
Profit for the period before tax | |||
Adjustments for: | (0.8) | (0.7) | (1.4) |
Interest receivable | |||
Interest payable | 0.2 | 0.1 | 0.2 |
Impairment of investment in associate | - | 0.7 | 0.7 |
Write off of loans and receivables | - | 1.5 | 1.5 |
Contingent consideration | - | (0.8) | (0.8) |
Depreciation of property, plant and equipment | 5.8 | 5.4 | 11.2 |
Amortisation of intangible assets | 0.5 | 0.6 | 1.1 |
Share-based payment costs | 1.4 | 1.0 | 2.1 |
Impairment of assets classified as held for sale | 1.1 | - | - |
(Gain)/loss on sale of property, plant and equipment | (0.1) | 0.1 | (0.5) |
Operating cash flows before movements in working capital | 33.0 | 35.7 | 65.4 |
Decrease/(increase) in inventories | 0.9 | (1.3) | (1.8) |
Increase in receivables | (30.3) | (33.5) | (3.4) |
Increase in payables | 18.5 | 20.4 | - |
Difference between employer pension contributions and amounts recognised in the income statement | (2.9) | - | - |
Cash generated by operations | 19.2 | 21.3 | 60.2 |
Tax paid | (6.2) | (6.2) | (11.7) |
Net cash from operating activities | 13.0 | 15.1 | 48.5 |
Investing activities | - | - | (12.3) |
Acquisition of subsidiary | |||
Purchase of property, plant and equipment | (7.4) | (6.5) | (17.8) |
Proceeds on sale of property, plant and equipment | 0.2 | - | 0.6 |
Funds placed on fixed term deposit | (37.5) | (25.0) | (20.0) |
Funds returned from fixed term deposit | 25.0 | 65.0 | 40.0 |
Interest received | 0.5 | 1.1 | 1.4 |
Net cash used in investing activities | (19.2) | 34.6 | (8.1) |
Financing activities | - | 5.0 | 5.0 |
Loans made | |||
Loans repaid | - | (5.7) | (5.7) |
Lease payments | (1.1) | (1.0) | (1.9) |
Purchase of Company shares by employee benefit trusts | (1.9) | (2.6) | (3.6) |
Proceeds from disposal of Company shares by employee benefit trusts | 0.7 | 0.8 | 1.3 |
Dividends paid | (13.8) | (11.8) | (14.7) |
Interest paid | (0.1) | - | (0.1) |
Net cash used in financing activities | (16.2) | (15.3) | (19.7) |
Net (decrease)/increase in cash and cash equivalents | (22.4) | 34.4 | 20.7 |
Cash and cash equivalents at beginning of period | 33.6 | 12.9 | 12.9 |
Cash and cash equivalents at end of period | 11.2 | 47.3 | 33.6 |
Cash and cash equivalents per the cash flow statement comprises cash and cash equivalents per the statement of financial position of £17.3m, net of bank overdrafts of £6.1m for the period ended 27 July 2024.
A.G. BARR p.l.c. Interim Report 2024 | 8 |