AG Barr’s best known drink, Irn-Bru, is reputedly good for hangovers, so it may find a bit of hike in sales as shareholders nurse a thumping headache after the firm’s profits warning.
Among the most-badly hit is Nick Train who owns 14% of the Cumbernauld-based company, making him its biggest institutional shareholder.
The 29% fall in Barr’s share price following the warning that full-year profits will come in 20% lower, will see a few more millions wiped from a portfolio that had already taken a big whack from his exposure to Hargreaves Lansdown. It took a hit for its endorsement of Neil Woodford’s equity income fund soon after it was forced to suspend dealing.
That event wiped an estimated £150m from the Lindsell Train UK Equity Fund as Hargreaves saw £1.1bn knocked off its share price. Thankfully, the shares have recovered some ground.
He’ll now be hoping that the Barr price follows the same pattern, and there is enough in the statement to suggest the plunge is a (big) blip rather than the beginning of a sustained slump.
Management is focused on sorting out the recipe to two of its brands and is developing new products. The benefit of these actions won’t be seen until later this year or early 2020, but a full recovery looks a safe bet in the medium term.