AG Barr Continues to Build For Profitable Long-term Growth

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AG Barr Continues to Build For Profitable Long-term Growth

AG Barr Continues to Build For Profitable Long-term Growth
March 26
09:59 2015
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UK soft drinks manufacturer AG Barr has reported a 10% increase in profit before tax (pre-exceptional items) to £41.9 million for the 12 months to 25 January 2015 on turnover up by 2.7% to £260.9 million. Stripping out the impact of the loss of the Orangina brand, which exited the portfolio in July 2014, turnover increased by 3.3%

All the group’s core brands – Irn-Bru, Barr, Rubicon and Strathmore – grew, outperforming the market, with particularly strong growth coming from the stills segment driven by Strathmore water.  The 2.7% revenue growth comfortably outperformed a more lacklustre total UK soft drinks market.

Net margin rose by 100 bp to 16.1% as AG Barr benefited from the structural operating improvements which it has implemented in its supply chain and further overhead cost control, as well as a more benign cost of goods environment. Alongside its cost control actions, AG Barr has continued to invest in its long term success with significant capital investments in operating infrastructure and continued high levels of investment in our core brand equities, innovation and executional capability.

AGBarrFunkinIn September 2014, AG Barr entered a new partnership with Dr Pepper Snapple Group (DPSG) to develop the Snapple brand in the UK and on a wider European basis. The brand management transferred to AG Barr in January 2015. In February 2015, AG Barr completed the acquisition of Funkin for up to £21 million to gain entry to a new growth category – cocktail mixers and syrups.

Roger White, chief executive of AG Barr, comments: “We have delivered an excellent financial performance in difficult market conditions over the past 12 months, whilst continuing to build the platform required for sustained and profitable long-term growth. Looking forward we will continue our approach of tight cost control, rigorous cash management and focus on execution whilst continuing to invest for the long-term in our brands, assets and people.”

He continues: “Overall market conditions are expected to remain challenging. The UK soft drinks market is currently experiencing a period of price deflation which will, if sustained, make it more difficult for many businesses to deliver the top line growth of recent years. Whilst our year has started slowly, reflecting tough comparative trading and promotional phasing, we are confident that our management actions, combined with our proven business model, will enable us to further unlock the significant potential that AG Barr offers its shareholders this year and into the future.”

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