AG Barr has reported a 10 per cent rise in annual profits from £38.1 million to £41.9m.

The Irn-Bru maker grew annual sales 2.7 per cent to £260.9m in the 12 months to January 25 this year.

However the Cumbernauld business warned on the dangers of deflation.

Roger White, chief executive, said: "We have delivered an excellent financial performance in difficult market conditions over the past 12 months, whilst continuing to build the platform required for sustained and profitable long-term growth.

"Overall market conditions are expected to remain challenging. The U.K. soft drinks market is currently experiencing a period of price deflation which will, if sustained, make it more difficult for many businesses to deliver the top line growth of recent years."