Irn-Bru maker's profits up as sugar-free drinks rise to 40% of sales
Irn-Bru maker AG Barr has reported a pre-tax profit of £45.4 million for the year, an increase of 2.5%, despite the introduction of the sugar tax.
However, the Cumbernauld-based group’s statutory profit before tax was £44.5 million, down from £44.9 million the previous year, reflecting a one-off past service pension charge of £0.7m.
The company, which also produces drink brands including Rubicon, Strathmore and Funkin, saw its revenue grow 5.6% to £279 million for the year ended 26 January.
AG Barr has proposed a total dividend for the year of 16.64 pence per share, an increase of 7.0% over the previous year.
The firm has had to deal with the soft drinks industry levy and said today it has successfully delivered a reformulation plan with 99% of its soft drinks portfolio currently exempt from the ‘sugar tax’. As a result, its sugar tax bill was £200,000. Irn-Bru sugar free variants now account for 40% of the total brand. It said the brand benefited also from a continued focus on increasing distribution.
AG Barr said it has significantly increased its volume share within the total UK soft drinks market, with a strong trading performance in strategic growth market of England and Wales.
It added that innovation continues to support growth, particularly Rubicon Spring, Irn-Bru Xtra and Funkin.
It has committed to introducing a minimum of 30% recycled material into its PET bottles by 2022, Its £30 million share repurchase programme expected to complete during the course of 2019.
Roger White, AG Barr chief executive, said: “At the outset of 2018 we set out a clear strategy and specific actions which we believed were required to deliver continued financial success during what we forecast to be a year of significant changes across our industry.
“I am pleased to report we have delivered another strong financial performance having adapted well to both the circumstances we anticipated and those which were less expected. It is with this backdrop in mind that I emphasise the flexibility and strength of our business model, people and brands, all of which continue to deliver consistently.”
He added that the group has grown revenue by 8% and 5.6% respectively over the past two years, reflecting the growth potential of its business.
White said that while the uncertainty across the UK economy is likely to prevail for the foreseeable future, the group has consistently demonstrated over the long-term that its strategy and execution are “fit for purpose and resilient”.
Article Credit: Insider