Strong trading across brands
Revenue up at Irn-Bru maker in rising soft drinks market
Soft drinks market is growing
Irn-Bru maker AG Barr, says revenue will be up by 5% this year as the soft drinks market grew by 3%.
The company, whose brands also include Rubicon, Strathmore and Funkin, expects incom to be c.£277m, against £264.1m last time.
In a trading update it said strong trading across its brands led to further market share volume gains in a UK soft drinks market which saw volume up 3% while value increased by 8%.
It said the impact of the Soft Drinks Industry Levy “has been evident across the UK soft drinks market with value growth significantly outstripping volume in the period.
“Having taken the opportunity to drive our volume growth during this period, we expect to return to a more value-led trading strategy in 2019.”
Investing across the brands, assets and people has had a moderate impact on operating margin.
tight control on costs has been maintained and the balance sheet remains robust. The £30m share repurchase programme has continued and the company now expects it to end this year, slightly later than previously indicated.
For the financial year ending 26 January the company remains confident of delivering profit ahead of the prior year and in line with the board’s expectations.
“Looking ahead, the current political and economic uncertainty in the UK looks set to continue. For the soft drinks industry, further regulatory intervention is on the horizon and consumer dynamics continue to evolve. Our strong and flexible business model, our portfolio of differentiated and growing brands and our well-invested and efficient asset base give us confidence for continued profitable growth as we enter a new financial year.”
AG Barr will announce its full year financial results on 26 March.
John Moore, Senior Investment Manager at Brewin Dolphin Scotland, said: “It’s another set of sweet results from AG Barr, despite previous worries over the effect of the sugar tax.
“While AG Barr has one eye on further regulatory intervention, the company remains a rare asset in UK terms: a smaller, family-owned business with solid fundamentals.
“It is financially strong, cash-generative, and has rewarded shareholders, which is reflected in a strong stock price – up nearly a quarter on the same time last year, despite market volatility. While takeover speculation persists, investors should look beyond that and focus on a business that offers the potential for self-financed growth served by a very robust balance sheet.”