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Barr posts effervescent earnings as portfolio continues to expand
Beverage manufacturer A.G. Barr posted its final results for the 52 weeks ended 27 January on Tuesday, with statutory profit before tax improving 4.2% to £44.9m on revenue which was ahead 8.0% to £277.7m.
The FTSE 250 company, which produces brands including IRN-BRU, Rubicon, Strathmore and Funkin, said profit before tax and exceptional items had increased 4.0% to £44.1m, while its gross margin was 20 basis points higher at 47.1%.
Its operating margin before exceptional items decreased by 60 basis points to 16.2%.
Basic earnings per share before exceptional items were up 3.4% at 31.30p, while basic earnings per share were ahead 4.8% at 32.25p.
The company's net cash position at year-end stood at £15.0m.
Barr's board proposed a final dividend of 11.84p per share, up from 10.87p a year earlier, to give a proposed total dividend for the year of 15.55p per share - an increase of 8.0% over the prior year.
On the strategic front, Barr reported "strong" core brand trading, as well as the continued successful innovation accelerated growth across its soft drinks portfolio, significantly outperforming the market.
Funkin revenue grew 25% during the year, which the board said reflected growth across all product segments.
It said 99% of its portfolio was also now out of the scope of the soft drinks industry levy.
A new long term strategic partnership agreement was completed with Australian firm Bundaberg Brewed Drinks, which would become effective in April, in addition to the San Benedetto partnership disclosed earlier in the year.
The company said its PET investment at Milton Keynes was delivered successfully, and its share repurchase programme was progressing to plan.
It also had a "strong" innovation pipeline for 2018.
"Over the past 12 months we have delivered consistent broad-based sales growth across our portfolio, well ahead of the soft drinks market performance throughout the year, supported by successful innovation, strong core brands and further development of our partnerships," said chief executive Roger White.
"The UK economic landscape is expected to remain uncertain for business as a whole, with regulation, changing customer dynamics and consumer preferences adding further volatility for the soft drinks industry."
White said Barr had a "strong and flexible" business model and a growing portfolio of brands, both established and nascent, which reflected the requirements of changing consumers.
"We remain confident in our ability to capitalise on the opportunities to grow our business and deliver long-term value to shareholders."