25th Mar 2014 10:11
LONDON (Alliance News) - Scottish soft-drinks maker AG Barr PLC Tuesday reported a strong set of results for its recent financial year, with an increase in both revenue and profit that was driven by strong growth in carbonated drinks such as Irn Bru and Barr.
The producer of drinks brands that also include Tizer and Rubicon has continued to warn that looking ahead, it expects the tough competitive market conditions to continue. Chief Executive Roger White gave a cautious but confident outlook for the year ahead, as the group raised its total dividend for the year by 10% to 11.02 pence per share.
"Despite remaining cautious regarding the environment we operate in and the challenges we face, we are confident in our future prospects," said White in a statement.
For the 12 months ended January 26, the group reported a 6.9% increase in revenues to GBP254.1 million, up from GBP237.6 million a year earlier, which drove its pretax profit for the year up 8.5% to GBP34.3 million, compared with GBP31.6 million the prior year.
It said it margins improved during the year, reflecting improvements in the cost of goods, controlled overheads and a positive product sales mix.
"The improvement in our margins has not come at the expense of our continued investment in our brands, where marketing and promotional spend has further increased year on year," it said.
The soft-drinks maker said its core brands - Irn Bru, Barr, Rubicon and its franchise energy brand Rockstar - delivered total revenues growth of 8% and outperformed the market during the year, driven by particularly strong growth from the carbonates segment.
AG Barr said the group's overall performance was driven by strong growth in carbonated drinks, which grew by 8.2% in overall value, while its still drinks portfolio had a more subdued year, growing by 2.7% in overall value terms.
It also said that sales in Scotland now account for 40% of its total revenue.
AG Barr has said over the last few quarters that it is now focused on organic growth rather than acquisitions, following its failed merger with rival Britvic PLC in July last year.
AG Barr said Tuesday that due to the changing landscape of the soft drinks market in the UK over the last year, with the acquisition of Lucozade and Ribena by Japanese drinks company Suntory, its Orangina contract, which is due to expire at the end of 2014, will transfer into the new Suntory Lucozade Ribena operation.
"At this stage we have not completed the planning for the transfer of the brand but we do not anticipate that this will have any material impact on either our operational or financial performance going forward due to the relatively insignificant scale of the brand, its revenues and gross profit generation," the company said in a statement.
During the year, the group's new production and warehouse facility at Magna Park in Milton Keynes became fully operational.
The company said it held net debt at the end of the period of GBP2.1 million, having reigned this in significantly from GBP25.6 million a year earlier.
AG Barr shares were trading 2.5% higher Tuesday morning, at 596.62 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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