IRN-Bru maker AG Barr yesterday said it would be targeting customers south of the border as it puts the aborted Britvic merger behind it.
Drawing a line under Cumbernauld-based Barr’s failed merger with rival Britvic last year, chief executive Roger White said: “It [the merger proposal] seems like a very long time ago to me now. We just did all the things we were doing before that diversion.
“[England and Wales] is definitely where the opportunity is. We have a 22 per cent market share in Scotland, we have 2.5 per cent in England and Wales, so we have a lot to go for there.”
Scotland accounts for 40 per cent of Barr’s revenues and continue to grow in line with the overall market, while sales in England and Wales climbed more than 9 per cent in the year.
The firm’s new facility at Milton Keynes became operational during 2013, and is seen by analysts as a linchpin in the company’s strategy of expanding its operations south of the Border.
Barr, whose other core brands are Barr, Rubicon and Rockstar, grew volumes 5 per cent in the year, double the growth rate of the wider soft drinks market.
“It is very pleasing to outperform, we are getting the fruits of our labour,” White said.
Barr’s underlying pre-tax profits lifted 9.6 per cent to £38.1 million, on turnover up 6.9 per cent at £254.1m in the year to 26 January.
A proposed final dividend of 8.19p (7.4p) gives a total dividend for the year up 10 per cent at 11.02p. Barr’s debts in the period fell to just £2.1m from £25.6m, with White saying the group should be cash‑positive by the end of 2014.
However, he said this was unlikely to translate into share buybacks on top of dividends. “Buybacks are not something we have been desperately positive about historically. We have always felt there are good ways to reinvest the money,” White added.
He said that Barr and its competitors had faced strong economic and consumer headwinds for several years, but that part of the soft drinks sector’s resilience was due to offering “little treats” to customers.
The company said that the sector had been helped in 2013 by “the exceptionally hot weather in July and generally warm summer more than making up for a cold, wet start to the year”.
White said Barr’s sales growth in the second half was double that of the first half as the company responded to “aggressive” price promotions from its rivals.
He said the business was also receiving “very positive customer feedback” for its role in supporting and supplying the Commonwealth Games in Glasgow this summer.