Shares of A.G. Barr, the Cumbernauld-based maker of Irn-Bru, Rubicon energy drinks and Funkin cocktail mixers, rose as much as 5% after it published a positive trading update for the 52 weeks ended January 29, 2023, saying group revenue rose about 17% to £315 million.
The company said it anticipates delivering a full-year profit performance ahead of the prior year, and slightly ahead of current market expectations.
Barr recently acquired MOMA Foods Limited, a porridge and plant-based milk business, and Leeds-based Boost Drinks.
“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, with full year revenue growth expected to be c.17% on a reported basis and c.15% on a like-for-like basis,” said the firm.
“The prior financial year included an extra week’s trading, while revenue for the year ended 29 January 2023 was strengthened by an 8-week contribution from the Boost brand, which was acquired by A.G. BARR on 5 December 2022, and a full year of MOMA.
“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.
“As anticipated, the inflationary backdrop across the UK continued across the second half of our financial year.
“We have remained focused on supporting our employees, customers and consumers alongside taking positive action to mitigate the inflationary cost pressures.
“We are pleased to confirm that we anticipate delivering a full-year profit performance ahead of the prior year, and slightly ahead of current market expectations.
“We expect our year end cash position to be robust following the acquisitions completed in December 2022.”
In its 2023-24 outlook, Barr said it anticipates further revenue growth across the group with a continuation of strong brand momentum.
“This is despite a backdrop of continued high inflation and the planned introduction of a deposit return scheme (DRS) in Scotland in August 2023, both of which have the potential to impact consumer behaviour,” added Barr.
“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.
“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.”