AG Barr pours cold water over Britvic break-up talk

Profits at the Cumbernauld-based firm took a £4.9 million hit after its proposed reverse takeover of Pepsi-bottler Britvic collapsed in July due to delays caused by a Competition Commission probe.

Barr tabled its merger offer in November after Britvic had been forced to withdraw its Robinson Fruit Shoot drinks from the market over cap safety fears.

But Britvic recovered while regulators were mulling the deal and then rejected an improved offer from Barr.

Wayne Brown, an analyst at Investec Securities, said that fresh “speculation around a break up of Britvic” would be a catalyst for Barr’s share price.

But White, pictured below, told The Scotsman: “We didn’t have to do a deal before Britvic and we still don’t now. It was an opportunity that came up and we will continue to look at opportunities.”

White said it was “steady as she goes” for Barr, building up its “balance sheet strength” to fund both organic growth and any acquisitions.

Asked if he had any regrets about the collapse of the Britvic deal, White said: “It was over a year’s worth of work. To say you put a year’s worth of work into anything and at the end of it you don’t achieve what you set out to do, it’s a little bit disappointing.”

Barr is known to have been approached about the sale of Lucozade and Ribena by FTSE 100 pharmaceuticals giant GlaxoSmithKline, although the brands were eventually sold earlier this month for £1.35 billion to Japanese drinks outfit Suntory, which also owns Orangina Schweppes and whisky distiller Morrison Bowmore.

White’s comments came as Barr posted a 12.3 per cent rise in underlying half-year profits to £16.6m, allowing the firm to increase its interim dividend by 8 per cent to 2.825p.

Sales grew by 5.8 per cent to £128.7m, compared with 4.5 per cent growth for the soft drinks market as a whole.

White said that Barr wouldn’t plunge Irn-Bru into a price war, despite analysts noting the heavy discounting introduced by some of its rivals and tough comparisons with last summer’s Olympic Games in London.

Analysts have welcomed the launch of Barr’s production facility in Milton Keynes to help push Irn-Bru and other drinks further into the English and Welsh markets.

Investec’s Brown said: “It is easy to understand why AG Barr enjoys a premium rating. AG Barr’s performance continues to accelerate ahead of the market and highlights an increasing disparity between itself and some key competitors.”

Charles Pick, an analyst at Numis Securities, added: “August trading was OK, but be aware that August of the last financial year was solid as regarded weather, plus there was the Olympics.”