AG Barr serves up mild improvement amid fizzy market

Irn Bru maker AG Barr nudged annual profits higher as it maintained its market share in a "volatile and uncertain" market.

After the announcement of a UK soft drinks sugar tax in last year's Budget and amid ongoing changes in consumer tastes and preferences, the company completed a major staff downsizing in September and recently announced a cut to the sugar content of its iconic Scottish beverage.

Still, over the year to 28 January, core brands Irn-Bru and Rubicon increased sales 3.2% and 4.9% respectively, helping push group revenues up 1.5% to £257.1m.

Profit before tax increased 4.4% on the prior year to £43.1m and statutory profit before tax and exceptional items increased 2.7% on the prior year to £42.4m.

Operating margin before exceptional items improved 50bps to 16.8% following our continued tight cost control.

Exceptional items are mainly representing a net gain from closure of a defined benefit pension scheme, September's staff reorganisation and some other one-off costs.

With free cash flow improved by £15m, a proposed final dividend of 10.87p per share gave a proposed total dividend for the year of 14.40p per share, an increase of 8.0% over the prior year.

Chief executive Roger White hailed the fact the company had delivered a solid financial performance "considerable progress" made across the business over the last 12 months and delivered a solid financial performance in volatile and uncertain market conditions.

"As consumer tastes and preferences continue to change, our recent announcement that 90% of Company owned brands will contain less than 5g of total sugars per 100ml by the autumn of 2017 is a positive demonstration of how the business is responding to consumers' needs with both pace and commitment," he said.

"The UK consumer environment remains uncertain, however we are confident that our great brands, effective business model, clear strategy and strong team ensure we are well placed to realise the full potential of our business and to deliver consistent long-term shareholder value."