AG Barr toasts jump in annual sales

Irn-Bru maker AG Barr reported a jump in annual sales on Tuesday, despite inflationary pressures starting to hit home.

The Scottish drinks firm reported revenues of £267m for the 53 weeks to 30 January, a 17.5% hike on the previous year and marginally ahead of its revised guidance, issued in November, for around £264m.

The figure also exceeds pre-pandemic revenues achieved in the year to 30 January 2020, of £255.7m.

Operating margin before exceptional items is expected to be around 15.6%, compared to 14.8% a year previously, with pre-tax profits on the same basis "marginally ahead" of guidance for around £41m.

However, AJ Barr - which also owns the Funkin pre-mixed cocktails brand and Rubicon, among others - added that inflationary pressures had ramped up as the year drew to a close.

It noted: "We have intitiated several cost control actions to reduce the impact of these rising costs, and have adjusted our pricing with customers where appropriate.

"With the published rate of inflation in the UK now above 5%, the highest level for 20 years, we will continue to seek opportunities across the coming year to offset the impact on our business."

Chief executive Roger White said: "We are delighted with the both the resilience our business has demonstrated and the growth we have delivered.

"We plan to further invest in our business for 2022/23 and remain confident in our ability to deliver continued growth in both revenue and profit in the coming year."

Darren Shirley, analyst at Shore Capital, said: "Management has previously highlight the inflationary pressures, particularly across packaging and energy costs, which have come through as expected.

"However, we are pleased that through a combination of cost control and price adjustments such known pressures have been covered, though potential headwinds remain. Looking into the 2023 full year, we highlight CO2, fruit and recycled plastics as areas for management to keep an eye one [and are] normally difficult to hedge, alongside the general wage inflation that remains prevalence in the system.

"We reiterate our view that AG Barr is a very high-quality business with an excellent management team."

AG Barr, which is due to publish full-year results on 29 March, is a house stock of Shore Capital.