AG Barr profits buoyed by acquisitions and soft drinks demand
- The Cumbernauld-based company is best known for manufacturing Irn-Bru
- Its sales climbed by around a third to £210.4m for the 26 weeks ending 30 July
- AG Barr has recently acquired energy drinks maker Boost and MOMA Foods
AG Barr’s half-year earnings have soared thanks to recent takeovers and a rise in soft drinks sales.
The Cumbernauld-based company, best known for manufacturing Irn-Bru, posted pre-tax profit growth of 12.6 per cent to £27.8million for the 26 weeks ending 30 July.
Turnover climbed by around a third to £210.4million on price hikes, volume growth, and higher marketing investment in brands like Funkin cocktails.
Scotland’s favourite: Cumbernauld-based AG Barr is best known for manufacturing Irn-Bru
Irn-Bru further extended its share of England and Wales’ soft drinks market after purchases of Scotland’s most popular fizzy drink expanded by 8 per cent.
However, the overwhelming bulk of sales growth was driven by the acquisitions of energy drinks maker Boost and oat milk producer MOMA Foods.
In December last year, Barr bought the former company in a £32million deal before acquiring the latter, which also sells granola, porridge, and bircher muesli, a fortnight later.
Roger White, AG Barr’s outgoing chief executive, said: ‘We have made significant financial and strategic progress in the first half and have exciting plans in place for the balance of the year to sustain our growth momentum.
Following the result, the FTSE 250 business has upheld its recently revised annual guidance for profit to be ‘marginally above’ the top end of analyst forecasts despite wet weather hitting trade during July and August.
Russ Mould, investment director at AJ Bell, said the outlook was a ‘highly creditable outcome and suggests the company’s portfolio of products retains strong appeal’.
He added: ‘The affordable luxury of a soft drink is the kind of purchase people are less likely to put off even if they’re feeling the squeeze and, if they like the brand, they’re unlikely to be discouraged by a few pence being added to the purchase price.’
In August, White declared his intention to stand down within the coming 12 months, having spent about two decades at the helm, making him one of the longest-serving CEOs of a publicly-listed UK firm.
He was the first chief executive to come from outside the Barr family when he took the top job in 2004.
Since that time, AG Barr shares have soared more than fourfold on the back of acquisitions and the sustained popularity of Irn-Bru.
His departure comes after former chairman Robin Barr, reportedly one of only three people who know the recipe for Irn-Bru, left the company in May following 58 years on its board.
AG Barr shares were 0.1 per cent lower at 484.5p on Tuesday morning and have slid by around 10 per cent over the past 12 months.