AG BARR chief executive Roger White signalled possible interest in the Lucozade and Ribena brands which are being sold by pharmaceuticals giant GlaxoSmithKline, as the Irn-Bru manufacturer reported strong trading.
And Mr White claimed yesterday that AG Barr's trading performance was ahead of rival Britvic, the Hertfordshire-based company with which the Scottish soft-drinks group attempted unsuccessfully to merge.
The initial merger deal was scuppered earlier this year by an unexpected referral to the Competition Commission, which eventually cleared the combination.
AG Barr this month walked away from a fresh attempt at a tie-up, after offering Britvic slightly improved terms for a merger and having these rejected.
Asked whether AG Barr might be interested in buying Lucozade and Ribena, Mr White replied: "GlaxoSmithKline has publicly said they will sell that business before the end of the year. As far as I am concerned, the process hasn't started (in terms of) information being available."
He added: "We would always be interested in businesses and brands we think we can add value to. We will wait and see what happens."
It has been estimated that the Lucozade and Ribena brands could fetch more than £1 billion.
Mr White declined to be drawn on how AG Barr might finance any move for Lucozade and Ribena.
He said: "It is very early days. As far as we are aware, the process isn't due to kick off until September."
AG Barr yesterday reported that, in the latest six months, it had "continued to grow well ahead of the market".
It said it anticipated sales revenue of about £127.5 million in the six months to July 28, the first half of its financial year. AG Barr noted this would be 4.9% higher than in its previous first half.
The company revealed its sales growth had accelerated sharply in the latest three months, citing the positive impact of marketing initiatives and good weather from late June onwards. It said it anticipated that sales in its second quarter would be up 9.8% on the same period of last year.
Mr White highlighted strong performances by Irn-Bru, Rubicon and the Barr range of carbonated drinks.
Asked how AG Barr's trading performance compared with that of Britvic, which also published an update yesterday, Mr White highlighted a fall in sales volumes at his company's Hertfordshire-based rival.
Britvic said its sales volumes both in Great Britain and overall were, over the first three quarters of its financial year to September, down 3.3% on a year earlier.
However, the Britvic trading period is not as up-to-date as that of AG Barr, and does not include some of the recent period of hot and sunny weather.
Mr White, who said about half of AG Barr's year-on-year growth in sales revenue in its first half had come from volume and about half from value, acknowledged Britvic's trading period was not entirely comparable.
However, he added: "I think their (Britvic's) year-to-date volumes were down 3%, something like that. Whatever way you look at it, our growth is ahead of theirs, and particularly when you look at the volume side of things."
In its financial year to date, Britvic's revenues in Great Britain were up 1.3% on a year earlier. Its overall revenues were up 1.5%.
AG Barr said yesterday that its profit margins in its first half had improved relative to last year.
Asked if he believed AG Barr's latest trading statement showed it did not need Britvic as a merger partner, Mr White replied: "I don't think we needed Britvic 12 months ago, when we first started the process (of looking at a merger) and we don't need them now. It was an opportunity to create value for everybody's shareholders, and sadly it didn't happen.
"We didn't need them (Britvic) either time."
Mr White added: "We and our shareholders are quite happy with AG Barr continuing to grow and develop as it was then, and it is still now, as hopefully these most recent figures show."
Shares in AG Barr fell 22.5p to 535p yesterday, in spite of the sales growth, giving the group a stock market worth of about £625m.
Investec, AG Barr's broker, forecasts the group will make underlying pre-tax profits of £37.5m in the year to next January, up from £35m in the prior 12 months.
AG Barr, based at Cumbernauld in North Lanarkshire, employs about 970 people.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article