By Karen Peattie

IRN-BRU maker AG Barr has said profits are on track to beat expected forecasts thanks to pubs, bars and restaurants restocking after coronavirus restrictions relaxed.

The Cumbernauld-based soft drinks company pointed to better-than-anticipated trading in recent months, attributing the performance to a bounceback in the hospitality sector as people started socialising again.

In an unexpected trading update, the firm, led by chief executive Roger White, said it now expects pre-tax profit for the current 53-week financial year, to the end of January 2022, to be slightly ahead of the £37.4 million recorded in 2019-20, before the pandemic struck.

AG Barr said: “At our full-year results on March 30, 2021 we communicated that the business was in strong financial health, with our brands and business poised for growth on a like-for-like basis.

“Trading since then has been better than anticipated, driven by a combination of factors, some Covid-related including customer restocking in the hospitality sector in particular, and some associated with underlying brand momentum such as the positive performance of recent innovation launches.”

Sales of soft drinks traditionally spike during the summer months and the recent spell of hot weather will be warmly welcomed by Barr and others drinks companies.

The firm, which produces and markets some of the UK’s leading drinks brands including its flagship IRN-BRU, Rubicon and Strathmore, said in a trading statement in May that its Funkin cocktail ingredients business was already beginning to see the benefits of the reopening of the hospitality sector. It also flagged continuing growth in consumers drinking Funkin cocktails at home.

New product launches including Rubicom Law Energy were also boosting trading momentum, it said.

Last month, the firm announced that Mark Allen, former chief executive of Dairy Crest, has been appointed as chairman-designate, replacing John Nicolson who will step down from the board prior to the next annual meeting in May 2022.

Analysts at Shore Capital noted: “We warmly welcome this unscheduled update from Barr, a very high-quality business that has had to face into the major headwinds of Covid and the loss of the Rockstar business.

“Fundamentally, though, this is a great business with top-quality leadership, first-class manufacturing facilities, great British brands with regional position and authority, including Scotland’s own Irn-Bru, strong margins, excellent cash flow and a fine financial backbone.

“We would imagine that recent visitors to the group’s Cumbernauld base, Her Majesty Queen Elizabeth II, and the Duke of Cambridge, will also be delighted to see today’s news.”

The group will provide further information at its scheduled first-half trading update on August 3.