Irn-Bru maker AG Barr to keep lid on prices as sales push ahead of pre-Covid levels
Irn-Bru maker AG Barr has seen profits push ahead of pre-Covid levels but cautioned over the outlook amid “significant inflationary pressures”.
Chief executive Roger White said the soft drinks group was taking mitigating actions across all areas of the business, while trying to keep a cap on any price increases for its products.
He said this firm was “doubling down on being as efficient as possible” in areas such as revenue management and procurement.
While consumers face a squeeze on spending amid the cost-of-living crisis, Barr is hopeful that its most famous product will remain an “affordable treat” for many.
Results for the year ended January 30 revealed a profit before tax and exceptional items of £41.5 million, which compares with £32.8m a year earlier, and is also ahead of the £37.4m banked in the 52 weeks to January 25, 2020.
Revenues in the year just past totalled £268.6m - a figure that compares with £227m and £255.7m in the previous 12-month periods.
The firm noted that all brands were in growth with core brands now ahead of pre-Covid levels. Cumbernauld-based Barr is also behind the likes of the Rubicon and Funkin brands.
The company proposed an interim dividend of 2p per share, and final and special dividends of 10p each.
White said: “Our business and brands have once again proven their resilience in uncertain and often challenging circumstances.
“We have accelerated our revenue growth and consequently delivered a strong financial performance. In the year we have recommenced our dividend, alongside paying a one-off special dividend, and our balance sheet has continued to strengthen.”
He added: “Trading in the early weeks of the new financial year has been well ahead of the prior year and in line with our expectations.
“Like most companies we are facing significant inflationary pressures but we are well placed as a group to deal with these and will continue to seek to manage our exposure proactively through mitigating actions across revenue management, pricing, procurement and cost control.”
Analyst at house brokerage Shore Capital noted: “Cash flow is prodigious (year-end balance of (£69m) and the balance sheet is very strong, a virtue at the best of times.
“Amidst volatile and still uncertain times, we retain our forecasts for Barr, highlighting its strong positive traits.”
AJ Bell investment director Russ Mould said: “While it couldn’t have foreseen the Ukraine war pushing up the cost of living further, AG Barr last year taking steps to diversify its income might prove to have been a wise move.
“An investment in plant-based foods group Moma gives it a position in the foods sector and a new avenue through which to explore earnings growth opportunities.
“Decent weather this spring and summer would be a major boost to the company, so too the Queen’s Jubilee bank holiday break which could turn out to be a four-day bumper sales period for all companies in the hospitality sector.”
In December, Barr swallowed a majority stake in Moma Foods, one of the UK’s fastest growing porridge brands.
A message from the Editor:
Thank you for reading this article. We’re more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers. If you haven’t already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription: www.scotsman.com/subscriptions
Want to join the conversation? Please or to comment on this article.