AG Barr boosts full-year performance forecasts as Irn-Bru maker benefits from price hikes and acquisitions
- AG Barr expects sales to grow by c.17% to £315m for the year ending 29 January
- The company predicts annual earnings will be ‘slightly ahead’ of expectations
- Irn-Bru, Rubicon and Tizer are among the brands owned by the soft drinks firm
AG Barr anticipates full-year sales and profits will surpass market forecasts, supported by price rises and strong performances from its newly-acquired brands.
The soft drinks producer behind Irn-Bru and Tizer expects to report revenue growing by around 17 per cent to £315million for the year ending 29 January, compared to analyst forecasts of £302million.
It also predicts annual earnings will be ‘slightly ahead’ of expectations and higher than the previous 12 months, when it made pre-tax profits of £42.2million.
Performance: Irn-Bru and Tizer maker AG Barr said it expects to report revenue growing by around 17 per cent to £315million for the year ending 29 January
Turnover received a boost from price hikes made last February in response to the surging cost of raw materials, such as packaging, glass and the carbon dioxide needed to fizz its drinks.
Revenue was additionally uplifted by the recent takeover of two brands: Leeds-based energy drinks maker Boost and oat milk producer MOMA Foods.
The Scottish company bought the former business in early December in a deal worth £20million upfront, with up to £12million more on offer depending on revenues and profits over the next two years.
A few weeks later, it completed the full buyout of MOMA, whose products include porridge, granola and bircher muesli, having initially purchased a 60 per cent stake in the group the prior year.
MOMA supplies many of Britain’s biggest supermarkets, such as Morrisons, Tesco and Sainsbury’s, as well as budget airline EasyJet and JD Wetherspoon.
AG Barr was partly motivated to invest in the firm by the surging popularity of plant-based milk and veganism, especially among Gen Z and millennials.
Its chief executive Roger White said: ‘We have accelerated the development of the business, further building our portfolio of differentiated brands with the acquisition of Boost and taking full ownership of MOMA.’
Trading also benefited during the year from the warm summer weather and a continued recovery in consumption at hospitality venues, which had been closed or subjected to tough restrictions for much of the last two years.
Lockdowns particularly affected demand for the firm’s Strathmore water bottles and Rubicon drinks, with the latter hit by the absence of certain promotional activities over Ramadan.
Sales rebounded significantly as pubs, bars and restaurants gradually opened, the volume of take-home purchases remained resilient, and customers lapped up the group’s core carbonated soft drinks and Funkin cocktail mixers.
AG Barr expects revenue to grow further this year, despite inflationary pressures and the introduction of a deposit return scheme in Scotland this August.
Under this plan, people buying a single-use drinks container will pay a 20p deposit that they can only reclaim if taken to a ‘return point,’ such as a shopping centre or supermarket.
AG Barr shares were up 4.55 per cent to 551p on late Tuesday morning, making them one of the top five risers on the FTSE All-Share Index.
Read more at DailyMail.co.uk