The soft drinks group reported a 30.5 per cent slide in statutory pre-tax profits to £26 million for the year to January 24 as sales fell 11.2 per cent to £227m. The revenue figure was confirmed in a trading update in January.
Sales across the pubs and hospitality sector plummeted due to repeated lockdowns and trading restrictions during the pandemic and the group was unable to offset this despite surging trade at supermarkets and convenience stores.
The Cumbernauld-headquartered firm, which is also behind the Rubicon, Strathmore and Funkin brands, said restrictions since December, alongside the end of its contract to sell and distribute Rockstar energy drinks in October, left second-half sales down 14.6 per cent.
AG Barr kept dividends on hold, having paused them last April, but said it remained “committed” to restarting payouts to shareholders in the current 2021-22 financial year.
Chief executive Roger White said: “We delivered a resilient financial performance in a year that was difficult for all. I am extremely proud of everyone in our business for their commitment and flexibility, which allowed us to remain fully operational throughout the pandemic.
“Whilst there now appears to be a route out of lockdown, the immediate future remains uncertain. Notwithstanding this current backdrop, our strategy for the year ahead is to support our core growth initiatives with significant investment.
“We have exciting plans to deliver across the group and are confident of continuing to make further progress in the coming year.”
The firm said it was benefiting from the trend for locked-down Britons to drink cocktails at home, which is boosting demand for its Funkin ready-to-drink cocktails.
It is also investing in the growing energy drink market, recently launching Rubicon RAW Energy and driving sales for its Irn-Bru Energy brand.
Irn-Bru sales dropped 6.5 per cent over the year, which it said was a “robust” performance in the pandemic, helped by rising demand for Irn-Bru Energy and Irn-Bru Xtra.
John Moore, senior investment manager at wealth management firm Brewin Dolphin, said: “Despite the very tough trading environment, AG Barr has demonstrated its resilience as a business, ending the year with a stronger balance sheet than it did the previous 12 months.
“Whilst there will be an element of higher investment in the re-opening and recovery phase, the key question will be what the company does with the £50m net cash that has been built up over the course of the pandemic.
“There is a commitment to recommencing dividends in the year ending January 2022, but no firm plans announced. Another option could be to buy back shares at today’s level, which would enhance the recovery potential for remaining shareholders.
“Or, taking a more organic approach, it could acquire another brand to replace Rockstar. Whatever decision it chooses to take, AG Barr is in a strong position to lean into the recovery and start looking at the next chapter for the business.”