Why iconic Irn-Bru maker AG Barr is now a £420 million sales business
“AG Barr’s trading update for the year is more than robust, confirming very healthy sales and volume growth” – Shore Capital analysts
The maker of Irn-Bru is on track for record annual sales of £420 million as “Scotland’s other national drink” continues to attract new fans.
In a trading update, AG Barr said overall sales in the year to January 25 were expected to show a 5 per cent gain over the £400m generated in the previous 12 months. Full year adjusted operating margin is set to show an improvement to 13.5 per cent from 12.3 per cent, helping to drive double-digit profit growth.
The Cumbernauld-headquartered group said all three of its core soft drinks brands - Irn-Bru, Rubicon and Boost - performed strongly during the year. Rubicon was the stand-out performer, achieving another year of double-digit revenue growth. Irn-Bru - the company’s most famous product - also delivered strong revenue growth and is now said to be one of the top five carbonated soft drinks in the UK, thanks to a concerted push south of the Border in recent years. Meanwhile, the Funkin ready-to-drink cocktail business continued to “grow at pace” through retail distribution gains and innovation, Barr’s noted.
Bosses said the business was continuing to invest heavily to support brand growth and improve efficiency. Overall capital spend in the year of around £19m included new and upgraded bottling lines at the Cumbernauld site, providing “increased capacity and capability”. The group ended the year with more than £60m of net cash, up from £53.6m a year earlier. AG Barr’s full-year results are due to be released on March 25.
Chief executive Euan Sutherland said: “AG 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.”
John Moore, senior investment manager at wealth firm RBC Brewin Dolphin, said: “AG Barr’s trading statement confirms the strong momentum at the company, with a 5 per cent uplift in sales translating into double-digit profits growth. However, the Irn-Bru maker is not sitting on its laurels, with investment in capex and strategic initiatives this year underlying its long-term ambitions.
“Meanwhile, cash to hand of £60m provides management with the opportunity to consider further acquisition targets. Whilst the share price has been in the doldrums of late, this statement should remind investors of the business’s core qualities.”
Analysts at house brokerage Shore Capital said the group was “doing exactly what it says on the can”. They noted: “AG Barr’s trading update for the year is more than robust, confirming very healthy sales and volume growth, coupled with a margin rebuild in line with medium-term plans. We see much to like and a significant opportunity at modest valuations.”
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