31st Jan 2023 09:43
(Alliance News) - AG Barr PLC on Tuesday said it expects annual profit to beat market expectations, though it warned of a margin hit due to inflationary pressure in its new financial year.
AG Barr shares were 3.0% higher at 543.00 pence each in London on Tuesday morning, among the best FTSE 250-listed performers.
The Irn-Bru maker added that its plans for new regulatory rules in Scotland on single-use containers are "well-advanced", though it noted consumer behaviour may be impacted.
For the year to January 29, AG Barr expects to report revenue of GBP315 million, up 17% from GBP268.6 million.
"We are pleased to report that the positive sales momentum reported in the first half of 2022/23 continued across the balance of the financial year," the Cumbernauld, Scotland-based drinks maker said.
"Our core brands have once again proven their strength and relevance to consumers. The newly acquired Boost and MOMA businesses will provide further room for growth as they develop both their consumer base and customer distribution. All four business units within the group - Barr Soft Drinks, Boost, Funkin and MOMA - contributed to our overall strong revenue performance."
AG Barr noted inflationary pressure persisted in the second half of 2022, though it still expects profit to be higher on-year. Its bottom line will be "slightly ahead of current market expectations", it predicts.
AG Barr reports 2022 results on March 28.
Looking further ahead, it expects more revenue growth in 2023.
"This is despite a backdrop of continued high inflation and the planned introduction of a deposit return scheme in Scotland in August 2023, both of which have the potential to impact consumer behaviour. Our internal implementation planning for DRS is well-advanced and we believe our strong brand portfolio and ongoing actions to mitigate inflation will support the delivery of our growth ambitions," AG Barr explained.
Under the DRS scheme, consumers will pay a 20 pence deposit when buying a drink in a single-use container. They will get the sum back if the container is returned. The programme goes live on August 16.
AG Barr added: "While we expect there to be an impact on operating margin as a result of inflationary cost pressures, and a short-term dilutive impact from the Boost acquisition, we will continue to invest in the long-term growth of our brands. At this early stage in the year we remain confident of delivering further profit growth in the year ahead in line with management expectations."
By Eric Cunha, Alliance News news editor
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