Irn-Bru and Rubicon maker AG Barr set for higher profits as sales flow
The soft drinks maker said it expects its full-year profits to come in slightly ahead of market expectations after acquiring new brands.
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Your support makes all the difference.Irn-Bru and Rubicon owner AG Barr has enjoyed stronger revenues after acquiring new brands, although it continued to caution over the inflation hit.
The soft drinks maker said it expects its reported revenues over the year to January 29 to be around 17% higher, to £315 million from £268.6 million in 2021.
This was driven up by a full year of sales of oat-based milk and porridge brand Moma, having taken full ownership of the brand at the end of 2021.
AG Barr also snapped up energy drinks brand Boost in a deal worth up to £32 million in early December, which it said has already strengthened its group sales over the last eight weeks.
As a result of the good performance and brand growth, AG Barr said its full-year profits are likely to come in slightly ahead of market expectations.
Thanks to the contribution from all our teams, we have performed strongly across the year. This positive performance has been supported by continued brand investment and great sales execution
However, the company, which also owns brands including KA, Strathmore and Funkin pre-mixed cocktails, said high inflation continues to impact the group and has the potential to affect consumer behaviour as people look to make cut backs.
The company has come under pressure over the past year from rising CO2 prices, commodities like aluminium and weaknesses on the pound.
Inflationary cost pressures will impact its operating margins and there will be a “short-term dilutive impact” from the acquisition of Boost, AG Barr anticipated.
Furthermore, the firm said it is planning to introduce a deposit return scheme in August, which means people are charged an extra deposit fee when they buy drinks in a single-use container, but it can be redeemed once the empty container is returned.
It is being rolled out as a government scheme in Scotland with the intention of minimising waste as it incentives people to recycle.
But AG Barr said its scheme could also affect consumer buying behaviour, with the move likely to push up drinks prices.
Roger White, the firm’s chief executive, said: “Thanks to the contribution from all our teams, we have performed strongly across the year. This positive performance has been supported by continued brand investment and great sales execution.
“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.
“As we enter a new financial year we are well placed to continue to develop and grow through our clear and consistent value-driven strategy.”
Shares in AG Barr jumped by 4% on Tuesday morning.