Irn-Bru maker A.G. Barr has posted a marginal rise in its first-half profit, helped by strong demand for its cocktail mixes and soft drinks, as well as due to price increases.
The beverage maker said its adjusted profit before tax came in at £27 million (€31.12 million) for the six-month period ended July 30, compared with £25.3 million (€29.2 million) a year ago.
Revenue for the period stood at £210.4 million, representing a 33.2% increase in reported revenue, driven by the contribution of the Boost Drinks business that was acquired in December of last year. Revenue was up 10.4% on a like-for-like basis.
Beverage makers have raised prices to keep up with high costs of energy and raw materials, while a cost-of-living crisis has not limited customers from spending on cocktail mixers.
Despite the wet summer months of July and August, the Cumbernauld-headquartered group maintained its annual profit expectations of marginally above the top end of analysts' forecast.
'Significant Progress'
"We have made significant financial and strategic progress in the first half and have exciting plans in place for the balance of the year to sustain our growth momentum," commented Roger White, chief executive of A.G. Barr.
"We remain confident in delivering a full year profit performance in line with our recently increased market expectations and are well positioned to deliver strong shareholder returns for the long-term."
Performance By Segment
In the first half, reported revenue in the soft drinks segment amounted to £181.9 million (€213.8 million), showing an increase of 38.9% compared to the same period in the previous year. Like-for-like revenue in soft drinks reached £145.8 million (€171.7 million), an increase of 11.3% from H1 2022/23.
Its Funkin cocktail mixes segment generated £23.3 million (€27.5 million) in reported revenue, reflecting a modest change of 2.6% compared to the previous year's figures, with like-for-like revenue also up by 2.6%.
Analyst Comment
Commenting on its performance, analyst Russ Mould of AJ Bell said, “Irn-Bru maker AG Barr had some fizz about it as it confirmed full year guidance after a strong first half. Given the wet weather and the impact this could have had on demand, this is a highly creditable outcome and suggests the company’s portfolio of products retains strong appeal.
“The affordable luxury of a soft drink is the kind of purchase people are less likely to put off even if they’re feeling the squeeze and, if they like the brand, they’re unlikely to be discouraged by a few pence being added to the purchase price.”
Additional reporting by ESM
