Boost for Irn-Bru maker
Barr benefits from sugar cut in soft drinks
Revealing a 2.7% rise in annual pre-exceptional taxable profits to £42.4 million, the company said it was responding to changing consumer tastes.
The company announced earlier this year that 90% of its owned brands will contain less than 5g of total sugars per 100ml by the autumn.
Chairman John Nicolson said: “We maintained our market share across the period and continued to invest in our brands, with the key brands, Irn-Bru and Rubicon, delivering good growth.
“Innovation has been a key strategic focus across the year and the launches of Irn-Bru Xtra and Rubicon Spring in particular, both no added sugar products, have proven successful.”
He said key partnerships with Rockstar and Dr Pepper Snapple Group continued to progress, complementing the group’s own portfolio in the UK and increasingly on an international basis.
This had delivered further growth, extending the firm’s international footprint and franchise territory agreements.
The Funkin business, acquired in 2015, continues to exceed acquisition expectations, and the company remains “highly encouraged” by the continued growth momentum of the Funkin brand and business, said Mr Nicolson.
The company is recommending an 8% rise in the total dividend and a £30 million return of cash to shareholders.
Roger White, chief executive, added: “We have made considerable progress across the business over the last 12 months and delivered a solid financial performance in volatile and uncertain market conditions.
“As consumer tastes and preferences continue to change, our recent announcement that 90% of company owned brands will contain less than 5g of total sugars per 100ml by the autumn of 2017 is a positive demonstration of how the business is responding to consumers’ needs with both pace and commitment.
“The UK consumer environment remains uncertain, however we are confident that our great brands, effective business model, clear strategy and strong team ensure we are well placed to realise the full potential of our business and to deliver consistent long-term shareholder value.”
· Statutory profit before tax increased by 4.4% to £43.1m (2016: £41.3m) on revenue of £257.1m (2016: £258.6m).
· Profit before tax and exceptional items increased by 2.7% to £42.4m (2016: £41.3m) with underlying revenue increasing by 1.5% to £257.1m (2016: £253.2m).
· Robust financial position:
o Gross margin increased by 10 bps to 46.9%
o Operating margin before exceptional items increased by 50bps to 16.8%
o Basic earnings per share increased by 3.9% to 30.78p (2016: 29.63p)
o Net cash position at year end of £9.7m (2016: Net debt £11.3m)
· Proposed final dividend of 10.87p per share (2016: 9.97p) to give a proposed total dividend for the year of 14.4p per share, an increase of 8% over the prior year.
· Strong core brand performance driven by innovation – IRN-BRU sales up 3.2%, Rubicon up 4.9%, on an underlying basis
· Maintained overall market share in UK soft drinks
· Funkin revenue growth of 27% reflecting growth across all product segments
· Commitment that 90% of the company owned brands will contain less than 5g of total sugars per 100ml by the autumn of 2017
· Successful implementation of a company-wide business reorganisation that has both enhanced our organisational capability and reduced our overhead base by around £3m
· Continued investment in assets and infrastructure – introduction of new glass filling capability at Cumbernauld and commencement of PET investment at our Milton Keynes site
· Announcement of a share repurchase programme of up to £30m