Shares in A.G. Barr rose over 6% yesterday after the drinks maker revealed that it was set to post a strong rise in annual profits after seeing robust demand for its core brands.
In a trading update ahead of the publication of full-year results at the end of March, the company said its adjusted operating margin was expected to show an improvement to around 13.5% (up from 12.3%) over the year to 25th January 2025, helping drive double-digit profit growth.
Revenue is forecast to have risen around 5% to £420m after all three of its core soft drinks brands – IRN-BRU, Rubicon and Boost – performed “strongly”. A.G. Barr noted that Rubicon was the stand-out performer, achieving another year of double-digit revenue growth. Its IRN-BRU also delivered “strong” revenue growth, with the group noting that it is now one of the top five carbonates in the UK.
A focus on value over volume and synergy benefits helped its recently-acquired Boost brand gain momentum in the second half, with a “step up in profitability”. The brand is now fully integrated into A.G. Barr’s commercial operation, and the insourcing of manufacturing “remains on track”.
Meanwhile, the firm’s FUNKIN brand, known for its cocktail mixers and ready-to-drink products, made retail distribution gains but faced “challenges” in the on-premise market.
Euan Sutherland, Chief Executive, commented: “A.G. Barr is in line to deliver another year of strong top-line growth, margin improvement and cash generation. These headline metrics highlight excellent progress towards our long-term financial goals. We have sustained brand momentum despite the well-trailed wider market pressures and continue to make good progress towards our margin target.
“We are committed to consistent long-term revenue growth and have confidence in further margin improvement as per our previous guidance. Our expectations for 2025/26 are unchanged and in line with market expectations.”
