AG Barr reports solid year, reaffirms outlook despite rising costs

(Sharecast News) - Soft drinks manufacturer AG Barr reported a robust set of results for the year ended 25 January on Tuesday, with adjusted profit before tax rising 15.8% to £58.5m and adjusted operating margin expanding by 130 basis points to 13.6%. The FTSE 250 company said its revenue increased 5.1% to £420.4m, driven by a 6.4% uplift in the soft drinks division, supported by strong performances from the Rubicon and Irn-Bru brands, along with successful new product launches and distribution gains.

Adjusted return on capital employed rose to 20.1%, up 170 basis points, while adjusted earnings per share grew 17.4% to 39.77p.

On a statutory basis, profit before tax rose 3.7% to £53.2m, reflecting £5.3m of adjusting items primarily related to the closure of the direct sales operation and the integration of Boost.

Statutory earnings per share increased by 3.5% to 35.81p.

Net cash at bank stood at £63.9m, up 19.2% year-on-year, underlining the group's strong financial position and ability to fund future strategic initiatives.

The board recommended a full-year dividend of 16.86p per share, an increase of 12%, reflecting the company's continued commitment to shareholder returns.

During the year, AG Barr advanced several strategic initiatives, including the integration of Boost into its Soft Drinks operations and insourcing of manufacturing, delivering operational and commercial synergies.

Efforts to strengthen the convenience channel and rebuild operating margins were said to be ahead of schedule.

Looking ahead, the company announced a planned simplification of its organisational structure, which would see the unification of the Barr Soft Drinks and Funkin businesses.

As part of the move, AG Barr said it intended to discontinue the Strathmore brand later in the financial year, a change that could result in the closure of its Forfar manufacturing site, subject to consultation.

The company said it entered the 2025-2026 financial year in a strong position, with current trading in line with expectations.

AG Barr reaffirmed its outlook for continued revenue growth and margin improvement, while noting that the year would include a 53rd trading week and increased costs from regulatory changes and employment-related contributions.

"Looking forward, we have a refreshed strategy centred on growth and are committed to our long-term financial targets," said chief executive officer Euan Sutherland.

"I am confident that successful execution of our plans will see another year of positive progress towards our long-term goals."

At 0902 GMT, shares in AG Barr were up 0.48% at 623p.

Reporting by Josh White for Sharecast.com.