AG Barr posts profits ahead of pre-Covid levels
Drinks maker AG Barr posted strong sales growth in the 53 weeks ended 30 January, resulting in a profit performance ahead of 2019/20 pre-Covid levels.
It reported strong momentum across the soft drinks portfolio supported by continued brand investment and innovation, with a particular focus on the energy category.
Statutory profit before tax came in at £42.2m, up 12.9% (52 weeks 2021: £26m) on a 5% rise in revenue to £268.6m (£227m).
The board recommends a final dividend of 10p per share to give a proposed total dividend for the full year of 12p per share, plus the 10p special dividend paid in October 2021. The final dividend is payable on 10 June 2022.
IRI Marketplace data for the 52 weeks to 29 January 2022 said the total UK soft drinks retail market increased in value by 8.9% and in volume by 1.7%. Carbonates grew in value by 7.3%, while stills grew 11.1%.
The company said: “We have maintained our value share of the soft drinks retail market, however the category disruption, as detailed above, means our strong revenue performance is not fully reflected in the retail market data read.
“That said, we have seen market share value gains in England and Wales, driven by significant growth in take home multipack formats. Our share in Scotland has been impacted by strong growth in certain channels not captured in the market read.”
Barr Soft Drinks, which represents over 85% of Group sales and gross profits, returned to revenue growth with strong volume gains across the core portfolio. This growth was driven by a resurgence in out of home consumption, as Covid-19 restrictions eased
The IRN-BRU brand grew volume, revenue and gross margin, benefitting from distribution gains in England as well as the reintroduction of IRN-BRU 1901 in Scotland.
Other portfolio brands, including Barr Flavours, KA and Simply Fruity, grew revenue and margin. The Strathmore Water brand grew volume and revenue as the hospitality sector reopened, although margin was constrained by significant inflation in glass costs.
Funkin revenue more than doubled the prior year up £19.9m to £36.9m, with margin up 396 basis points at 39.8%.
Roger White, chief executive, commented: “Our business and brands have once again proven their resilience in uncertain and often challenging circumstances.
“We have accelerated our revenue growth and consequently delivered a strong financial performance. In the year we have recommenced our dividend, alongside paying a one-off special dividend, and our balance sheet has continued to strengthen.
“Our focus on environmental sustainability has accelerated, as we increase our use of recycled materials, reduce our carbon footprint and ready our business for a successful deposit return scheme implementation, due to go live in Scotland in August 2023.
“We enter the new financial year with good momentum and exciting brand and sales plans. Trading in the early weeks of the new financial year has been well ahead of the prior year and in line with our expectations.”