AG Barr profits buoyed by acquisitions and soft drinks demand
AG Barr’s profits are supported by acquisitions and demand for soft drinks
- The Cumbernauld-based company is best known for producing Irn-Bru
- Sales rose by around a third to £210.4m for the 26 weeks ending July 30
- AG Barr recently acquired energy drink makers Boost and MOMA Foods
AG Barr’s half-year profit soared thanks to recent acquisitions and a rise in soft drink sales.
The Cumbernauld-based company, best known for producing Irn-Bru, posted pre-tax profit growth of 12.6 per cent to £27.8 million for the 26 weeks ended July 30.
Sales rose by around a third to £210.4 million thanks to price increases, volume growth and higher marketing investment in brands such as Funkin cocktails.
Scotland’s favorite: Cumbernauld-based AG Barr is best known for producing Irn-Bru
Irn-Bru further expanded its share of the soft drinks market in England and Wales after purchases of Scotland’s most popular carbonated drink increased by 8 percent.
However, the vast majority of the turnover growth was caused by the acquisitions of energy drink producer Boost and oat milk producer MOMA Foods.
In December last year, Barr bought the former company in a £32 million deal before acquiring the latter company, which also sells muesli, porridge and birch muesli, a fortnight later.
Roger White, outgoing CEO of AG Barr, said: “We made significant financial and strategic progress in the first half and have exciting plans for the remainder of the year to maintain our growth momentum.
Following the result, the FTSE 250 company has maintained its recently revised annual profit forecast to be ‘marginally above’ the top end of analyst forecasts, despite wet weather that affected trading in July and August.
Russ Mould, investment director at AJ Bell, said the outlook is a ‘highly creditable outcome and suggests the company’s product portfolio continues to have strong appeal’.
He added: ‘The affordable luxury of soft drinks is the kind of purchase people are less likely to put off, even when they feel the pressure, and if they like the brand they are unlikely to be discouraged by a few cents. is added to the purchase price.’
In August, White announced his intention to step down within the next 12 months after some 20 years at the helm, making him one of the longest-serving CEOs of a listed British company.
He was the first CEO to come from outside the Barr family when he took the top job in 2004.
Since that time, AG Barr shares have more than quadrupled thanks to acquisitions and the continued 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 after 58 years on the board.
AG Barr shares were 0.1 per cent lower at 484.5p on Tuesday morning and have fallen by around 10 per cent in the past 12 months.