The Irn-Bru owner has axed 13 jobs at its Forfar site after sales to hospitality customers plummeted by around 65% during the six months ended July 25.

Yesterday, AG Barr said group sales to the UK hospitality market had dropped by as much as 95% during the lockdown period.

The firm has also taken a further six staff members off its payroll at its Funkin cocktail mixer business, which was also hit by the downturn in sales.

The £10m write-down on the Strathmore brand and assets contributed to first-half profits at Barr falling by 62.2% to £5.1m.

The firm also booked a £1.5m impairment charge allocated for a “business re-engineering programme” to rationalise its internal supply chain and reduce the complexity of its portfolio and routes to market.

The costs are primarily associated with redundancy payments linked to the programme, which is now due to be completed in January next year.

In the six months to July, AG Barr’s revenue had declined by 7.6% to £113.2m amid the disruption caused by COVID-19. However, despite the plunge in profits and sales, investors responded positively as Barr said it remained on track to meet its revised guidance for the full year issued in July. AG Barr shares closed up nearly 12% at 415.81p, having increased by more than 18% during the day.

In July, AG Barr said that so long as another period of lockdown was not introduced, revenue for the full year would be down 12 to 15% on last year, with a “modest reduction in operating profit”. Last year, the company made an operating profit of £38.1m on revenue of £255.7m.

Roger White, chief executive of AG Barr, commented on the results: “We remain on course to deliver a full year performance in line with the revised expectations we communicated in the July 2020 trading update.

“We have continued to invest in our core brand equity for the long term, maintained our quality and service standards and remain a profitable and cash generative business in a robust drinks sector. We are confident that our business will continue to prove its resilience for the balance of this year and beyond.”

He added: “The Strathmore brand, in particular, has been impacted given the significance of its sales in this sector. Whilst we are seeing some recovery across hospitality, it will take time for the sector to regain momentum and as such we do not anticipate Strathmore returning to pre-COVID-19 sales levels in the foreseeable future. Regrettably, as a consequence, we have reduced our manufacturing workforce at our Forfar site and the brand and asset valuations have been impaired.”

Mr White told The Herald that the reductions will see the Strathmore plant move from a two-shift to a one-shift operation. He said: “It is a function of the demand for the product that they produce.”