AG BARR has signalled it is on track to beat revenue forecasts for its latest financial year, while declaring that it has been encouraged by consumer reaction to its revamped recipe for Irn-Bru.

The soft drinks giant caused considerable controversy when it unveiled the new formula for its flagship drink in early January.

Cumbernauld-based Barr moved to cut the sugar content of “Scotland’s other national drink” to ensure it will escape the forthcoming sugar tax. The Soft Drinks Industry Levy will be applied to products which contain at least five grammes of sugar per 100ml from April 6.

Barr’s move was met with some hostility from die-hard fans of Irn-Bru, with an online petition against the decision attracting tens of thousands of signatories.

The firm said yesterday that it had “anticipated” that the change would be met by “widespread media interest”. However, it stated that it has been buoyed by the consumer reaction so far.

Roger White, chief executive of AG Barr, said: “Irn-Bru is an important brand. It is important to consumers and for lots of people in Scotland.

“We recognise how passionate people are about the brand, as we are ourselves, and everything we have done has been with the long-term of the brand at heart.” He added: “We’ve had an encouraging response so far.”

Mr White noted that the new Irn-Bru recipe is the product of a three to four-year programme, involving the input of hundreds of members of staff and the sampling of thousands of prototypes. After such an exhaustive process, he said it has been pleasing to hear many consumers say the product continues to taste the same.

Barr now expects that as much as 99 per cent of its portfolio will contain less than five grammes of total sugars per 100ml before the sugar tax takes effect.

“Our extensive research and testing in the preceding years gave us confidence that we had an excellent taste match and, while it is still early days, the consumer response to the new product has so far been encouraging,” Barr told the City.

The comments on the new recipe were included in an upbeat statement to the stock exchange from Barr, which said it expects revenue to have increased by 7.5 per cent to around £277 million for the 52 weeks ended January 27 – ahead of analysts’ forecasts.

The company, which said it continues to outperform the wider UK soft drinks market, said its progress last year reflected the success of its innovation programme and the strong trading performance of is brands.

Noting that 2017 looks to have been a good year in revenue terms for AG Barr, Mr White said AG Barr is reaping the benefit of “innovation, the strength of our brands, and the investment we have made in the long run in these brands.” He also highlighted “the quality of our team in executing our plans”.

However, Barr warned that 2018 would be another challenging year because of continuing economic uncertainty, alongside “significant changes in regulation” in the soft drinks market and changing consumer tastes. It also flagged that it had “not been immune” to cost pressures, including the effects of sterling’s weakness since the Brexit vote.

Analysts at Shore Capital said: “Despite the challenging market conditions, which are expected to continue in 2018, we believe Barr enters the new financial year with a strong, efficient and flexible model and a portfolio, to management’s credit, that is extremely well-positioned to compete post the implementation of the soft drinks tax in April 2018.”

The analyst kept its full-year profit forecast of £43.6m before tax unchanged following the update. It added that it takes a “lot of heart” from the initial consumer response to the reformulated Irn-Bru, “understanding as we do the strong emotional connection that the product has, most particularly in the group’s Scottish heartlands.”

Shares in AG Barr edged up 8p to close at 650p.