AG Barr has defied the shrinking UK soft drinks market and volatile weather to post a 19.5% rise in pre-tax profit to £13.5m and boost dividend payouts by 7.8%. Shares soared 11.4% to close at 835p.
Turnover at Cumbernauld-based AG Barr was £104.7m over the six months to August 1, up 27.1% year-on-year, thanks largely to the £60m acquisition of exotic juice maker Rubicon last year.
But there was also substantial like-for-like growth of 11.5% despite a shrinking overall soft drinks market.
Revenues from the core Irn Bru brand were up 6.5%, with a particularly strong rise in sales in northern England. The soft drink market declined 1% over the same period. White said they had benefited less than expected from the summer after a warm June and July give way to a poor August.
But he added that rising sales in England, where the weather was better, had protected the company: “Five or 10 years ago, the business was largely a Scottish business. Now we are split 50/50 between Scotland and England and that is helpful from a trading point of view.”
The company has seen particularly strong sales in the north of England after basing promotional activities around sponsorship of rugby league.
Around 60% of sales of the fizzy orange drink are still from Scotland.
The strong result has allow AG Barr to increase its interim dividend by 7.8% on last year to 6.25p, taking the company’s recent share split into account. This will be paid on October 23. A number of other UK companies are expected to cut their income payouts in the coming months.
One black spot for the company was the continued problems of water brand Strathmore, whose sales were down 5.9% year-on-year.
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