Soft drinks maker AG Barr saw double digit profit growth and revenue up 5% last year as its three core brands all performed strongly.
Revenue grew to £420m for the full year ending 25 January, according to a company trading update, while operating margin recovered to 13.5% helping to drive “double digit profit growth”.
AG Barr said Rubicon was the stand-out performer with another year of double-digit revenue growth.
Irn Bru also delivered strong revenue growth and is now one of the top five carbonates in the UK, according to the Grocer’s Top Products survey.
Its Boost strategy - to focus on value over volume and synergy benefits - gained momentum in H2 with a rise in profitability, the company said. The brand is now fully integrated into its commercial operation while the move to bring manufacturing in-house is on track.
AG Barr said these projects will deliver commercial and operational synergies although at a one-off cost of £5m for the current financial year.
“AG Barr is in line to deliver another year of strong top line growth, margin improvement and cash generation. These headline metrics highlight excellent progress towards our long-term financial goals,” said CEO Euan Sutherland, who succeeded long-serving Roger White last summer.
Sutherland said expectations for the next financial year are unchanged and in line with market expectations.
AG Barr invested heavily this year with around £19m going on a new small format PET line and an upgraded large format PET line at its Cumbernauld site to boost capacity and capability.
It remains a “highly cash generative business” ending the year with more than £60m of net cash, up from £53.6m the year before.
Anubhav Malhotra, an analyst at Panmure Liberum, said this cash gave AG Barr ”significant M&A firepower…but if the right M&A opportunity doesn’t arrive, we should expect further cash returns to shareholders.”
He added the company has ”significant growth opportunities by way of distribution, innovation, pack formats, portfolio development,” with current margin tailwinds ”the perfect backdrop for the company to explore these opportunities.”
Last week, AG Barr announced former Britvic executive Dino Labbate was joining as its new chief commercial officer.
Labbate spent seven years in various sales roles at Britvic, latterly as commercial director for its hospitality channel.
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