26th Sep 2023 11:18
(Alliance News) - AG Barr PLC on Tuesday saw its interim results pop, with higher revenue and profit boosting its dividend, despite the wet summer.
"Irn-Bru maker AG Barr had some fizz about it as it confirmed full year guidance after a strong first half. Given the wet weather and the impact this could have had on demand, this is a highly creditable outcome and suggests the company's portfolio of products retains strong appeal," said AJ Bell's Russ Mould.
The Cumbernauld, Scotland-based drinks manufacturer, with brands including Irn-Bru, Rubicon, Funkin and Boost, on Tuesday said profit rose in its first half period from a year earlier alongside revenue, boosting its dividend payout to shareholders.
AG Barr reported a pretax profit of GBP27.8 million in the six months ended July 30, up from GBP24.7 million the previous year.
This was despite its cost of sales jumping 48% year-on-year to GBP131.0 million.
Revenue in the half climbed 33% to GBP210.4 million from GBP157.9 million, supported by the contribution of the Boost Drinks business, which was acquired by the firm in December.
AG Barr also raised its interim dividend to 2.65 pence per share from 2.50p a year earlier.
Shore Capital's Darren Shirley & Clive Black noted that the interim results were in line with expectations.
"We have made significant financial and strategic progress in the first half and have exciting plans in place for the balance of the year to sustain our growth momentum," said Chief Executive Officer Roger White.
Looking ahead, AG Barr said it had made "significant" financial and strategic progress in line with its long-term revenue and profit growth ambitions, amid "a year of investment" across the business.
"In August we communicated our expectation of delivering a full year profit performance marginally above the top end of analyst consensus. Despite the extended period of poor weather across the summer, we remain confident in delivering in line with these revised market expectations," the company said.
Victoria Scholar, head of investment at interactive investor, said: "Despite the challenging backdrop of a weak consumer, cost inflation and disappointing summer weather, the drinks maker has managed to navigate the headwinds by successfully raising prices and still maintaining demand. It has continued to enjoy strong consumer appetite for its range of soft drinks as well as cocktail mixes. While consumers may be cutting back on eating and drinking out in bars and restaurants, they still seem to be treating themselves to cocktail mixes and soft drinks to consume at home, even in the face of higher prices."
AJ Bell's Mould explained: "The affordable luxury of a soft drink is the kind of purchase people are less likely to put off even if they're feeling the squeeze and, if they like the brand, they're unlikely to be discouraged by a few pence being added to the purchase price."
Shares in AG Barr were up 0.4% to 486.78 pence each in London on Tuesday morning.
By Sophie Rose, Alliance News reporter
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